12.8 C
New York
Friday, May 20, 2022

EM ASIA FX-Doubts on oil rebound, soft yuan hurt Asia FX; won at 5-1/2-yr low

* 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)

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)

Related Articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Stay Connected

11,298FansLike
12,893FollowersFollow
751FollowersFollow
- Advertisement -

Latest Articles

Popular Articles