* Yuan down on strong dollar demand, weak midpoint
* Won falls on outflows; suspected Korea intervention limits
* Rupiah slides, Indonesia c.bank seen cutting rates
(Adds text, updates prices)
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By Jongwoo Cheon
SINGAPORE, Feb 17 (Reuters) – Most emerging Asian currencies
slid on Wednesday with South Korea’s won at a 5-1/2-year low on
some doubts over sustainability of an oil rebound, while a
weaker Chinese yuan further hurt sentiment on regional units.
The yuan slid on increasing dollar demand after
the long Lunar New Year holiday in China and after the central
bank set its daily guidance rate weaker again.
The Malaysian ringgit tracked the yuan’s weakness,
which contributed to traders dumping bullish bets on the
second-best performing emerging Asian currency this year.
Indonesia’s rupiah fell as the central bank is
expected to cut its policy interest rate on Thursday.
The won slid as offshore funds kept dumping it
after recent bond sales.
A top Federal Reserve official cemented expectations of slow
U.S. interest rate hikes, but that failed to support emerging
Asian currencies.
Boston Fed President Eric Rosengren said the U.S. central
bank should be “unhurried” as it considers when to again raise
interest rates given problems overseas and financial market
volatility that will likely dampen already low U.S. inflation.
Emerging Asian currencies have been pricing in views that
the Fed may not rush to raise borrowing costs, analysts said.
“Almost all of what we heard from Fed policymakers in the
past two weeks has been dovish,” said Christopher Wong, senior
FX analyst for Maybank in Singapore.
“There are other factors to look out for including ongoing
oil talks. I think the hurdle is very high for Iran to agree to
freeze production at January level.”
Wong expected softer emerging Asian currencies, in
particular the won and the Singapore dollar.
Crude oil futures rebounded on Wednesday in Asia on hopes
that a deal between Saudi Arabia and Russia to freeze oil output
at January levels would lead to a wider pact among producers
that could eventually see production cuts to support prices.
WON
The won lost nearly 1 percent to 1,228.4 per dollar, its
weakest since July 2010.
The South Korean currency pared some of the losses as the
foreign exchange authorities were suspected of intervening to
stem a further slide for the worst-performing Asian currency
this year, traders said.
Song In-chang, deputy finance minister in charge of
international finance affairs, said the country will take firm
action when needed to stabilise the foreign exchange market.
Despite the warning and suspected intervention, foreign
banks continued to sell the won, traders said.
The currency is seen weakening to 1,233.2, the 38.2 percent
Fibonacci retracement of its appreciation from 2009 to 2014,
analysts said.
South Korea’s foreign exchange bank deposits fell for a
third consecutive month in January to a near two-year low,
indicating support for the won could weaken.
RUPIAH
The rupiah slid as most Indonesian government bond prices
fell.
On Thursday, Bank Indonesia is predicted to make its second
rate cut this year as it tries to boost sluggish growth in
Southeast Asia’s largest economy.
Local importers bought dollars for payments, putting further
pressure on the rupiah.
The official Jakarta Interbank Spot Dollar Rate,
which the central bank introduced in 2013 to manage exchange
rate fluctuations, was fixed at 13,504, weaker than the previous
13,333.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0600 GMT
Currency Latest bid Previous day Pct Move
Japan yen 113.86 114.10 +0.21
Sing dlr 1.4067 1.4056 -0.08
Taiwan dlr 33.260 33.453 +0.58
Korean won 1226.24 1216.60 -0.79
Baht 35.63 35.61 -0.06
Peso 47.65 47.57 -0.16
Rupiah 13505.00 13395.00 -0.81
Rupee 68.59 68.37 -0.32
Ringgit 4.2050 4.1525 -1.25
Yuan 6.5251 6.5183 -0.10
Change so far in 2016
Currency Latest bid End prev year Pct Move
Japan yen 113.86 120.30 +5.66
Sing dlr 1.4067 1.4177 +0.78
Taiwan dlr 33.260 33.066 -0.58
Korean won 1226.24 1172.50 -4.38
Baht 35.63 36.00 +1.04
Peso 47.65 47.06 -1.23
Rupiah 13505.00 13785.00 +2.07
Rupee 68.59 66.15 -3.56
Ringgit 4.2050 4.2935 +2.10
Yuan 6.5251 6.4936 -0.48
(Editing by Richard Borsuk)
