Most Asian currencies slipped on Friday, with the South Korean won leading declines, as a sharp rise in new coronavirus cases outside mainland China sent investors scurrying to safer assets such as the US dollar. The South Korean won fell 0.6% after the country reported 52 new cases of the fast-spreading virus and data showed exports to China in the first 20 days of February slumped 3.7%.
"Continued rise in contagion could warrant a re-assessment of the macro fallout on Korea in terms of both supply chain disruption and inbound tourism," Maybank said in a note. The won has lost 2% this week, the most among its peers, and was on track to snap two weekly gains as the outbreak upends global growth and supply chains.
In Taiwan, one of the economies most exposed to the outbreak, export orders in January fell by their steepest in nearly seven years, data showed on Thursday. The Taiwan dollar weakened 0.3% and was set to lose more than 1% for the week.
The rising economic toll of the virus and its rapid spread outside China prompted investors to seek shelter in the dollar, which hovered near a three-year peak hit overnight. The Malaysian ringgit slipped 1.4% for the week, its biggest weekly drop since November 2016. The Thai baht lost 0.5% and was on track to post a weekly drop of 1.4%. Southeast Asia's second-largest economy is among those hit hardest by the outbreak, prompting the country's central bank to lower growth forecasts earlier this week.
Meanwhile, the Indonesian rupiah slipped 0.3%. The country's central bank lowered its key policy interest rate on Thursday, in a bid to cushion the blow from the epidemic, which also pushed Bank Indonesia to cut this year's economic growth outlook. Financial markets in India were closed for a holiday.
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