Asian currencies slip on rising concerns over virus impact to businesses
Global financial markets felt the sting as investors took a more cautious stance in trade
Asian currencies slipped on Tuesday as increasing financial fallout of the virus outbreak in China and chances of central banks opting for monetary easing as a measure to shore up regional economies weighed on investor sentiment.
With death toll climbing to nearly 1,900 in China, disruptions and delays in operations in the mainland owing to the epidemic and its impact remained a concern for businesses.
"Caution from Apple that it doesn't expect to meet revenue guidance for 1Q due to supply disruptions could also potentially nudge markets to re-evaluate the macro impact of Covid-19," a Maybank note said.
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Apple Inc became one of the biggest corporate casualties of the epidemic after it warned on Monday it was unlikely to meet its quarterly sales guidance.
Global financial markets felt the sting as investors took a more cautious stance in trade.
The Chinese yuan slipped 0.2% as fears of the macro-impact of the virus offset the steps taken by the country's central bank to boost the economy.
Further dampening sentiment, a China regulator said the epidemic will have a "major" impact on industries in the mainland in February.
Meanwhile, the Indonesian rupiah weakened 0.2%, weighed down by growing expectations of a rate cut by the Bank Indonesia meeting on Thursday.
A slim majority of analysts polled by Reuters expect Indonesia's central bank to resume its easing cycle to cushion any economic impact from the coronavirus.
The Thai baht also slipped 0.2%. Pressure is building on the central bank of Southeast Asia's second largest economy to cut rates to support an economy which posted its slowest pace of growth in five years for 2019.
The Bank of Thailand will next review monetary policy and provide updated economic forecasts on March 25.
The South Korean won declined up to 0.5% to its weakest level in over a week and was the worst performer among Asian units.
The country's president Moon Jae-in said the economy is in an emergency situation and needs to stimulate domestic demand and that the government should take every possible measure.
"The COVID-19 outbreak could disrupt tech supply chains and even derail the nascent turnaround in the global semiconductor industry," an ANZ note warned, adding that tech-reliant economies like Taiwan and South Korea are likely to be the worst hit.
