BENGALURU: Most Asian currencies lost ground on Monday as unexpectedly weak monthly trade data from China inflamed concerns of a deteriorating global growth outlook in the face of a potentially sharper slowdown in the world's second largest-economy.
Official data showed exports from China in December unexpectedly shrank 4.4 percent from a year ago, its biggest monthly drop in two years. Imports also contracted the most since July 2016.
The Chinese yuan gave up most of its earlier gains on the shock data, and was modestly up at 0453 GMT. Most of its emerging Asian peers also took a hit having gained last week on optimism over Sino-U.S. trade talks and a dovish outlook for Federal Reserve policy.
"Investors are now less distracted by romanticised versions of US-China sweet (trade) talk and against the mood music of a less stridently hawkish Fed," said Vishnu Varathan, senior economist at Mizuho Bank, in a note.
Softening demand in China is already being felt around the world, with slowing sales of goods ranging from iPhones to automobiles prompting profit warnings from the likes of Apple and Jaguar Land Rover.
The Korean won led declines in the region, dropping 0.5 percent to 1,122.40 on the dollar.
OCBC Bank in a note to clients said that the protracted US-China trade tensions have prompted many foreign investors to pull out funds from South Korea's export-led economy.
Elsewhere, the Indonesian rupiah softened 0.3 percent, ahead of the country's December trade data due on Tuesday.
The trade deficit in Southeast Asia's largest economy is seen shrinking by half in December with exports expected to have rebounded and as imports grew more slowly as oil prices dipped, a Reuters poll showed.
The Thai baht, the Philippine peso and the Taiwan dollar also were marginally weaker on the dollar.
The Indian rupee weakened 0.2 percent against the greenback. Markets are awaiting the country's inflation data due later in the day.
According to a Reuters poll, India's December retail inflation is expected to have eased to its lowest since June 2017 as food costs and fuel prices rose at a slower pace.
Such an outcome is expected to give the Reserve Bank of India breathing space to keep policy on hold in the face of a slowing economy.
Yet the pressure on the rupee, which had managed to bounce towards the end last year, is expected to build in 2019.
Analysts cite uncertainty around national elections in May and a wobbly economy as a negative for the rupee this year, another Reuters poll found.
Last week, data showed the country's industrial output slumped in November. - Reuters