EM ASIA FX-Currencies rebound as unprecedented Fed stimulus stalls dollar rush

By Shriya Ramakrishnan

* Fed effort should derail dollar momentum - analyst * South Korean won top gainer in the region, up 1% * IDR marks best intraday gain in about two weeks (Adds text, updates prices) By Shriya Ramakrishnan March 24 (Reuters) - Emerging Asian currencies rebounded on Tuesday as dollar buyers took a pause after the U.S. Federal Reserve pledged unlimited quantitative easing and took steps to backstop a range of credit to cushion the economic blow from the coronavirus outbreak. In an unprecedented move, the Fed on Monday said it would back purchases of corporate bonds, roll out a programme to get credit to small and medium-sized business and expand asset purchases to stabilise financial markets. "Currency wars are here to stay and right now, the Fed's efforts should derail a lot of the momentum that was building for the U.S. dollar," said Edward Moya, a senior market analyst at OANDA. Amid increasing uncertainty around the coronavirus and its impact, the dollar has been a major gainer as investors have dumped holdings in stocks, commodities and riskier bonds, while companies have also sought to retain hard cash to fund operations. Leading gains in the region, the South Korean won advanced 1% to 1,253.60 against the dollar. Jingyi Pan, a market strategist at IG Asia, said with South Korea being amongst the worst hit in terms of the virus case count, a flattening infection curve helped to calm some of the frayed nerves. South Korea reported 76 new coronavirus cases on Tuesday, maintaining a downward trend in new infections and raising hopes that Asia's largest outbreak outside China may be slowing. Aiding sentiment further, the government doubled a planned economic rescue package to $80 billion to save companies hit by the outbreak and put a floor under crashing stocks and bond markets. The Indonesian rupiah strengthened 0.5% to 16,475 per dollar, its best intraday performance in nearly two weeks. Indonesia's parliamentary budget committee recommended the government raise a cap on the state budget deficit to 5% of gross domestic product to allow for more budget manoeuvering as it tackles the spread of coronavirus. The rupiah, which has weakened 15.8% so far this year, has been the worst hit in the region by excessive dollar strength. The Philippine peso climbed 0.7%, while the Thai baht firmed 0.2% ahead of a central bank policy meeting on Wednesday. A slim majority of economists expect the Bank of Thailand to cut its benchmark interest rate to a new low, a Reuters poll showed, after slashing it in a surprise meeting last week to mitigate the hit to its economy from the outbreak. The Singapore dollar and the Taiwan dollar gained 0.4% each against the greenback. Singapore is set to unveil on Thursday new relief packages to help firms and households weather the economic impact from the pandemic, just weeks after it announced multi-billion dollar virus-fighting schemes in its annual budget. CURRENCIES VS U.S. DOLLAR Change on the day at 0619 GMT Currency Latest bid Previous Pct day Move Japan yen 110.470 111.2 +0.66 Sing dlr 1.454 1.4592 +0.36 Taiwan dlr 30.290 30.405 +0.38 Korean won 1253.600 1266.5 +1.03 Baht 32.900 32.955 +0.17 Peso 50.890 51.25 +0.71 Rupiah 16475.000 16550 +0.46 Rupee 76.143 76.30 +0.21 Ringgit 4.439 4.44 +0.02 Yuan 7.089 7.0900 +0.02 Change so far in 2020 Currency Latest bid End 2019 Pct Move Japan yen 110.470 108.61 -1.68 Sing dlr 1.454 1.3444 -7.53 Taiwan dlr 30.290 30.106 -0.61 Korean won 1253.600 1156.40 -7.75 Baht 32.900 29.91 -9.09 Peso 50.890 50.65 -0.47 Rupiah 16475.000 13880 -15.75 Rupee 76.143 71.38 -6.25 Ringgit 4.439 4.0890 -7.88 Yuan 7.089 6.9632 -1.77 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Subhranshu Sahu)