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* Asian currencies bear the pain of local outbreaks * South Korean stocks are on track for their worst weekly drop since February * The Thai baht is expected to conclude the year at 33.0 per dollar, according to HSBC
Anushka Trivedi contributed to this article.
Reuters, July 9 – On Friday, the Thai baht was poised for its fourth weekly drop as investor confidence in the country’s tourism-dependent economy deteriorated in the face of a fast spreading Delta form of coronavirus throughout Asia and beyond, which has clouded global development prospects.
After Seoul was placed under the strictest coronavirus restrictions, the South Korean won plummeted 0.4 percent to end the day down, while the Indonesian rupiah and the Singapore dollar both fell 0.2 percent.
The baht fell 0.7 percent to 32.68 per dollar ahead of Prime Minister Prayuth Chan-announcement ocha’s to tighten travel restrictions. The baht last traded at this level in April 2020, during the COVID-19 outbreak.
After the US Federal Reserve’s hawkish shift in tone at its June meeting, all regional currencies fell, but the baht was the hardest hit, as severe limits hit consumption and the tourism industry, which accounts for 12% of the country’s GDP.
“The baht’s Achilles heel is destroyed tourism,” according to HSBC analysts, who predict the currency to drop further during a delayed recovery, lowering their year-end forecast for the currency by approximately 7% to 33.0 per dollar.
The Bank of Thailand reduced its growth projection for the economy last month, forecasting that it would only recover to pre-pandemic levels by 2023, causing investor sentiment to plummet.

A spike in COVID-19 cases in developed economies has stoked fears of more lockdowns, which could stymie global trade. Asia’s emerging markets have already been hammered by recent devastating outbreaks and a slow pace of vaccination, but a jump in COVID-19 cases in developed economies has stoked fears of more lockdowns, which could stymie global trade.
“Broad risk aversion was even more evident in the foreign exchange arena, with the US dollar on the rise… regional (Asian) currencies bore the burden due to intensifying COVID breakouts here,” Maybank analysts wrote in a report.
“The state of emergency imposed for Tokyo on Thursday could be the catalyst, emphasizing the complexities of overcoming the Delta variation.”
Most Asian stocks fell in accordance with the shaky market environment, with the Philippine stock index leading the way below, falling as much as 2.6 percent to its lowest level since March 19.
South Korean stocks fell 1.1 percent, their lowest level since February, while Taiwanese and Indian stocks fell 1.2 percent and 0.4 percent, respectively.

HIGHLIGHTS

** South Korea recorded 1,316 new COVID-19 infections, a daily record for the country. ** Indonesian 10-year benchmark yields rose 4.1 basis points to 6.572 percent. Jollibee Foods Corp, down 3.4 percent, and LT Group Inc, down 3.2 percent, are the biggest index losers in the Philippines.
At 06:39 GMT, Asian stock indices and currencies were trading.
INDEX STOCKS DAILY percent STOCKS YTD percent COUNTRY FX RIC FX DAILY percent FX YTD percent COUNTRY FX RIC FX DAILY percent FX YTD percent COUNTRY FX RIC FX DAILY percent FX YTD percent COUNTRY FX
-0.28 -6.23 -0.63 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.81 1.
0.00 1.51 China +0.05 +0.62
-2.10 -0.31 12.14 India +0.10 -2.10
Indonesia -0.17 -3.47 0.12 1.14 Indonesia -0.17 -3.47 0.12 1.14 Indonesia -0.17 -3
Malaysia -0.14 -3.97 0.57 -6.75 Malaysia -0.14 -3.97 0.57 -6.75 Malaysia -0.14 -3
Philippines +0.30 -4.10 -1.30 -4.27 Philippines +0.30 -4.10 -1.30 -4.27 Philippines +0.30 -4.
S.Korea -0.36 -5.47 -1.07 11.99 S.Korea -0.36 -5.47 -1.07 11.99 S.Korea –
Singapore -0.18 -2.50 0.59 9.92 Singapore -0.18 -2.50 0.59 9.92 Singapore -0.18 -2
Taiwan -0.17 +1.43 -1.15 19.88 Taiwan -0.17 +1.43 -1.15 19.88 Taiwan -0.17 +1
Thailand -0.73 -8.38 0.07 6.59 Thailand -0.73 -8.38 0.07 Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand

(In Bengaluru, Anushka Trivedi reported; Tom Westbrook contributed additional reporting; Shailesh Kuber edited.)/nRead More

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