By Shriya Ramakrishnan
March 31 (Reuters) – Most Asian currencies ticked higher on Tuesday after a key survey showed factory activity in China returned to growth, even though the global coronavirus crisis showed little signs of slowing.
Factory activity in China unexpectedly expanded in March after contracting sharply to a record low in the previous month, but the rapid global spread of the coronavirus is expected to keep businesses and the overall economy under heavy pressure as foreign demand slumps.
“Recoveries in beleaguered Asian currencies will need more than one day of decent data to move the sentiment needle after a torrid two-months,” Jeffrey Halley, senior market analyst, Asia Pacific at OANDA, said in a note.
The data provided a slight lift to the onshore Chinese yuan CNY=CFXS, which gained as much as 0.2% to 7.086 against the greenback.
The South Korean won KRW=KFTC advanced 0.5%, in tandem with gains in the domestic equity market. .KS11
While central banks and governments around the world have stepped in with a slew of stimulus measures to calm frayed nerves, fears of a deep recession persist as most economies have entered lockdowns and cut growth forecasts for the year.
“The economic downgrades are happening everywhere, so to that extent, we are starting to see a coronavirus divergence trade rather than a yield cover conference trade,” Stephen Innes, chief global markets strategist at AxiCorp, said.
“Investors are buying currencies where they think the virus will pass quicker as a result of containment measures.”
The Malaysian ringgit MYR= led gains in the region, strengthening 0.6% against the dollar. The local currency benefited from a slight uptick in crude prices, with Malaysia being a net exporter of oil. O/R
The Southeast Asian nation expects its fiscal deficit to widen to 4% of gross domestic product this year because of the $58 billion stimulus measures announced to counter the pandemic’s economic impact.
The Indian rupee INR=IN rose marginally amid concerns over a continued spike in coronavirus cases. India reported 1,251 confirmed cases by Monday evening, up 227 from the previous day, its steepest single-day rise.
The Indonesian rupiah IDR=ID was nearly flat, while the Thai baht THB=TH edged up.
Thailand’s finance minister on Monday said the new stimulus package to alleviate the impact of the pandemic would be worth more than 500 billion baht ($15.32 billion), while the central bank said it had further expanded the scope of liquidity support.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0522 GMT
Currency
Latest bid
Previous day
Pct Move
Japan yen
108.290
107.81
-0.44
Sing dlr
1.424
1.4234
-0.06
Taiwan dlr
30.231
30.250
+0.06
Korean won
1218.700
1224.4
+0.47
Baht
32.630
32.67
+0.12
Peso
50.780
50.85
+0.14
Rupiah
16315.000
16325
+0.06
Rupee
75.585
75.65
+0.09
Ringgit
4.298
4.325
+0.63
Yuan
7.088
7.0975
+0.13
Change so far in 2020
Currency
Latest bid
End 2019
Pct Move
Japan yen
108.290
108.61
+0.30
Sing dlr
1.424
1.3444
-5.61
Taiwan dlr
30.231
30.106
-0.41
Korean won
1218.700
1156.40
-5.11
Baht
32.630
29.91
-8.34
Peso
50.780
50.65
-0.26
Rupiah
16315.000
13880
-14.92
Rupee
75.585
71.38
-5.56
Ringgit
4.298
4.0890
-4.86
Yuan
7.088
6.9632
-1.76
($1 = 32.6400 baht)
(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Subhranshu Sahu)
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