Most Asian currencies ease on China's woes; Malaysian ringgit leads losses

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BENGALURU (Jan 22): Most Asian currencies weakened on Tuesday as a slowdown in China's economy stoked worries over regional and global growth, denting the appetite for riskier assets.

The International Monetary Fund on Monday cut its world economic growth forecasts for 2019 and 2020, citing weakness in Europe and some emerging markets, and warned failure to resolve Sino-US trade dispute could further destabilise a slowing global economy.

The global lender also cited the risks of a sharper-than-expected slowdown in China and a possible "No Deal" Brexit, saying these could worsen volatility in financial markets.

China, the world's second-largest economy, grew 6.4% in the fourth quarter from a year earlier, the slowest pace since the depths of the global financial crisis, data showed on Monday. Full-year growth of 6.6% was the weakest in nearly three decades, and activity is expected to cool further in coming months.

"In forex markets, the dollar was mixed but noticeably stronger against Asian currencies pressured by softer Chinese GDP," said Mizuho Bank in a note on Tuesday.

Mizuho believes policymakers in major economies are expecting risks to increase, but will likely maintain their view that the chance of a recession this year is low.

The Malaysian ringgit was the top decliner, weakening as much as 0.5% ahead of inflation data scheduled for Thursday.

Malaysia's consumer price index (CPI) was expected to rise 0.4% in December from a year earlier, a Reuters poll showed, slightly faster than the previous month.

The Malaysian currency market was closed for a holiday on Monday when the China GDP data was released.

The Philippine peso declined as much as 0.3% to 52.900 against the dollar, its weakest level since Dec 27, 2018.

China's yuan weakened to a near two-week low against the US dollar, breaching the closely-watched 6.8 mark.

The Thai baht, the Indian rupee and the Singapore dollar also weakened slightly.

The Indonesian rupiah bucked the trend, strengthening as much as 0.2% after declining up to 0.4% in the previous session.

SOUTH KOREAN WON

The Korean won declined up to 0.3% to 1,130.90 against the dollar, its weakest level since Dec 20, 2018.

South Korea's GDP growth slowed to a six-year low, hurt by weakening exports, underlining a dimming outlook in the face of a slowdown in key trade partner China.

Tuesday's Bank of Korea GDP report showed growth of 1% in the fourth quarter, the fastest in three quarters as the economy rode a spurt in government stimulus. Seoul increased spending by 3.1% on-quarter, the biggest rise in almost nine years and helped boost construction and capital investment.

TAIWAN DOLLAR

The Taiwan dollar weakened slightly despite data showed that its December export orders fell 10.5%, far worse than the 3.2% decline forecast in the Reuters poll.

The island's exports had fallen 2.1% in November.

The following table shows rates for Asian currencies against the dollar at 0501 GMT.

CURRENCIES VS US DOLLAR

Currency               Latest bid  Previous day  % move
Japan yen              109.460     109.66        +0.18
Sing dlr               1.360       1.3588        -0.11
Taiwan dlr             30.859      30.851        -0.03
Korean won             1130.200    1128.1        -0.19
Baht                   31.830      31.775        -0.17
Peso                   52.880      52.74         -0.26
Rupiah                 14205.000   14220         +0.11
Rupee                  71.310      71.28         -0.05
Ringgit                4.130       4.11          -0.48
Yuan                   6.803       6.7961        -0.11

Change so far in 2019

Currency               Latest bid  End 2018      % move
Japan yen              109.460     109.56        +0.09
Sing dlr               1.360       1.3627        +0.18
Taiwan dlr             30.859      30.733        -0.41
Korean won             1130.200    1115.70       -1.28
Baht                   31.830      32.55         +2.26
Peso                   52.880      52.47         -0.78
Rupiah                 14205.000   14375         +1.20
Rupee                  71.310      69.77         -2.16
Ringgit                4.130       4.1300        +0.00
Yuan                   6.803       6.8730        +1.02