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EM ASIA FX-Most currencies fall as virus outbreak fuels rate-cut bets

By Rashmi Ashok

* Singapore dollar drops 0.9% to near four-month low * Thai baht slips 0.6% ahead of BOT decision due 0700 GMT * Philippine peso loses ground on rate-cut expectations (Adds text, updates prices) By Rashmi Ashok Feb 5 (Reuters) - The Singapore dollar skidded to a near four-month low on Wednesday, leading losses among Asian currencies as markets increasingly priced in chances of rate cuts by central banks in the region to limit an economic hit from a virus outbreak. The Monetary Authority of Singapore (MAS) said its exchange rate-based monetary policy stance remained unchanged, after having eased policy for the first time in three years at its last meeting in October. However, its statement - that its currency has room to ease within its current settings to accommodate any economic hit from the virus - was viewed by markets as an indicator of potential policy easing at the next meeting in April. In response, the Singapore dollar fell 0.9% to trade at 1.382 per dollar, the lowest in nearly four months. "The MAS' latest comments have prompted investors to price in the prospects of monetary policy easing in Singapore, before potential confirmation during the central bank's actual policy decision in April," said Han Tan, market analyst at FXTM. "An easing bias by the central bank could further dampen SGD's performance, potentially adding to the downward pressure, given the persisting concerns over the coronavirus outbreak's impact on the global economy." Meanwhile, rising expectations of rate cuts by most central banks in the region to fend off the economic impact of the coronavirus outbreak gave stocks a leg-up, but put pressure on currencies. The Philippine peso gave up 0.3% as expectations of a rate cut by the Bangko Sentral ng Pilipinas (BSP) at its Thursday meeting continued to rise. Even a surprise jump in January inflation to an eight-month high failed to dent the hopes, given the figure was still well within the central bank's comfort range. "We expect the benign inflation dynamics to afford the BSP scope to cut its policy rate at the Feb. 6 meeting to give the economy a boost to help navigate the more challenging global growth scenario," said Nicholas Mapa, a senior economist for Philippines at ING. Along a similar vein, the Thai baht skidded 0.6%, weakening past the key 31 per dollar level, just ahead of the Bank of Thailand's policy meeting due around 0700 GMT. A Reuters poll showed the BOT is expected to hold its benchmark rate at a record low, but a significant number of the economists participating in the poll forecast a rate cut, citing the coronavirus outbreak as a wild card in the decision. The following table shows rates for Asian currencies against the dollar at 0551 GMT. CURRENCIES VS U.S. DOLLAR Currency Latest bid Previous day Pct Move Japan yen 109.410 109.51 +0.09 Sing dlr 1.382 1.3699 -0.85 Taiwan dlr 30.086 30.207 +0.40 Korean won 1191.000 1187.4 -0.30 Baht 31.120 30.95 -0.55 Peso 50.870 50.71 -0.31 Rupiah 13715.000 13705 -0.07 Rupee 71.258 71.25 -0.01 Ringgit 4.122 4.109 -0.32 Yuan 7.005 6.9982 -0.10 Change so far in 2020 Currency Latest bid End 2019 Pct Move Japan yen 109.410 108.61 -0.73 Sing dlr 1.382 1.3444 -2.69 Taiwan dlr 30.086 30.106 +0.07 Korean won 1191.000 1156.40 -2.91 Baht 31.120 29.91 -3.89 Peso 50.870 50.65 -0.43 Rupiah 13715.000 13880 +1.20 Rupee 71.258 71.38 +0.17 Ringgit 4.122 4.0890 -0.80 Yuan 7.005 6.9632 -0.60 (Reporting by Rashmi Ashok in Bengaluru; Editing by Subhranshu Sahu)