March 25, 2019 / 5:21 AM / 5 months ago

EM ASIA FX-Asia FX weighed by global growth worries; baht gains ahead of poll results

    * Thai baht strengthens to 1-month high against dlr
    * U.S. recession risks to soon to judge 

 (Adds text, updates prices)
    By Nikhil Nainan
    March 25 (Reuters) - Worries over the health of the global
economy weighed on most Asian currencies on Monday, but the Thai
baht gained ahead of the results of the country's first election
since a 2014 coup.
    The spread between 3-month U.S. Treasury bills
and 10-year note yields inverted on Friday for the
first time since 2007.
    Historically, an inverted yield curve - where long-term
rates fall below short-term - has signalled an upcoming
    The concerns manifested into sharp losses across equity
markets in Asia, but analysts were cautious. 
    "The market is probably still somewhat undecided on the
prospects for the global economy," said Julian Wee, Investment
Strategist at Credit Suisse based in Singapore.
    "The curve inversion is nascent and might yet prove to be
brief, so we would not at this juncture base our projections too
heavily on that phenomenon."
    Indonesia's rupiah and the Indian rupee fell
0.4 percent and 0.2 percent, respectively, with both countries
facing key general elections that start next month. 
    South Korea's won was the worst performer of the
day, 0.5 percent weaker against the dollar at 1,135.3.
    Meanwhile, the Singapore dollar traded sideways for
much of the morning. Analysts are not expecting headline
inflation due later on Monday to result in policy changes by the
Monetary Authority of Singapore at its next meeting in April.
    "Against a weaker global growth outlook, Asia's export-led
currencies – the South Korean won and the Singapore dollar –
should be trading on the soft side this week," DBS said in a
    While saying recession fears were warranted, DBS guarded
against the downside risks, citing the Fed's dovish pivot as a
sign that their priority will be to cushion the slowdown risks. 
    The Thai baht strengthened 0.3 percent to 31.58 per U.S.
dollar, its highest in nearly one month, after a peaceful
general election on Sunday. Partial results showed a pro-army
party was ahead of anti-junta parties hoping to make a
    Thailand has seen a large exodus of foreign investment in
the lead up to the election, which has seen the baht give up
some of its strong gains early this year. However, the unit
still remains the regions best performer so far in 2019, up over
3 percent.
    A Thailand-based trader who did not wish to be identified
said there was an increase in capital inflows from offshore
players on Monday.  
    "With the election ending general drama-free and
violence-free, investors who had sat out on election concerns
are slowly returning to the market," analysts wrote in a Maybank
    However, Thai stocks dropped about 1 percent, with
analysts linking Monday's decline in global equities with the
benchmark's losses. 
 Change on the day at 0451 GMT                    
 Currency               Latest bid  Previous day  Pct Move
 Japan yen              109.950     109.91        -0.04
 Sing dlr               1.352       1.3523        +0.04
 Taiwan dlr             30.831      30.806        -0.08
 Korean won             1135.300    1130.1        -0.46
 Baht                   31.580      31.68         +0.32
 Peso                   52.530      52.65         +0.23
 Rupiah                 14210.000   14160         -0.35
 Rupee                  69.078      68.95         -0.18
 Ringgit                4.068       4.062         -0.15
 Yuan                   6.714       6.7180        +0.06
 Change so far in 2019                            
 Currency               Latest bid  End 2018      Pct Move
 Japan yen              109.950     109.56        -0.35
 Sing dlr               1.352       1.3627        +0.81
 Taiwan dlr             30.831      30.733        -0.32
 Korean won             1135.300    1115.70       -1.73
 Baht                   31.580      32.55         +3.07
 Peso                   52.530      52.47         -0.11
 Rupiah                 14210.000   14375         +1.16
 Rupee                  69.078      69.77         +1.00
 Ringgit                4.068       4.1300        +1.52
 Yuan                   6.714       6.8730        +2.37
 (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Kim
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