* Italy, S. Korea, Iran new frontiers in coronavirus spread
* Aussie, kiwi slide as outbreak's pace sparks new fears
* Yen left behind as gold and bonds rally
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Feb 24 (Reuters) - Asian currencies slid on
Monday as the rapid spread of the coronavirus outside China
drove fears of a pandemic and sent investors flocking to gold
and the dollar for safety.
Italy, South Korea and Iran posted sharp rises in infections
over the weekend. South Korea now has more than 760 cases, Italy
more than 150 and Iran 43 cases. The World Health Organization said it was worried about the
growing number without any clear link to the epicentre of the
outbreak in China. "The omens are not particularly good today," said Ray
Attrill, head of FX strategy at National Australia Bank in
Sydney. "The presumption was that we would see intermediate
supply chains quickly reconnected and I think the market's had
to go through a period of questioning that logic."
The Chinese, Australian, New Zealand, Singapore and Taiwan
currencies were all on the back foot, with the Aussie carving a
fresh 11-year low in early trade.
The Korean won KRW= plunged nearly 1% to a six-month low.
EMRG/FRX
Political turmoil in Malaysia added pressure to the ringgit
MYR= and sent it 0.6% lower to its weakest since September.
Yet risk aversion, which also saw stocks tumble and gold and
bonds rise, offered surprisingly little support to the yen
JPY= . MKTS/GLOB
After partially recovering last week's drop on Friday, it
traded flat at 111.55 per dollar as Asian investors discount its
safety value owing to Japan's virus exposure.
"The market reaction to the coronavirus appears to be
evolving, beginning to differentiate the currencies vulnerable
to the virus from the rest," Barclays analysts said in a note.
"U.S. dollar assets provide relative attractiveness," they
wrote. "In fact, our economists forecast no impact on U.S.
growth from Covid-19, with relatively few domestic incidents and
a low dependency on China's economy."
Against a basket of currencies =USD , the dollar crept back
toward an almost three-year peak touched last week, before soft
economic data knocked it from its perch on Friday. It was firmer against the euro at $1.0827 EUR= and pound
at $1.2946 GBP= . It last traded at $0.6613 per Australian
dollar AUD=D3 $0.6324 per kiwi NZD=D3 . AUD/
The coronavirus has killed more than 2,400 people in China,
which also accounts for 98% of global diagnoses. Four Chinese
provinces on Monday lowered their emergency response measures as
domestic containment efforts seem to be working. However, the weekend's spread outside of China appears to
have caught authorities off-guard.
Italy has halted the carnival of Venice, shut schools, and
sealed off affected towns across its wealthy north, but is
struggling to find out how and where the virus' spread began.
South Korea is on high alert and battling to stem steep
rises in infections - all adding to the already massive
disruption to the world's economy. "From here on, a lot will depend on how fast China can
resume production and contain negative implications for supply
chains and global economic growth," said Stephen Innes, Asia
Pacific Market Strategist at AxiCorp.