Rupiah leads Asia FX slides on US government, Fed woes: JAKARTA, Sept 2 — The Indonesian rupiah fell 1 per cent today, leading slides among emerging Asian currencies amid concerns over a possible US government shutdown and uncertainty about the Federal Reserve’s monetary policy outlook. The rupiah weakened to as low as 11,580 per dollar, matching yesterday’s low, which was the weakest since April 2009. Increasing dollar demand from local companies for month-end payments put pressure on the currency, though central bank intervention curbed losses, traders said. The South Korean won slid as offshore funds sold it and on dollar demand from importers. The Malaysian ringgit also weakened due to selling from offshore investors. Regional stocks fell as Tea Party backed US Senators are threatening to stall a bill to fund the US government. Suresh Kumar Ramanathan, head of regional interest rate and FX strategy at CIMB Investment Bank, said the Fed has technically started to taper off stimulus since Monday. On that day, the New York Fed said it accepted US$11.81 billion (RM38.2 billion) in cash as part of the first test of a new reserve repo tool that is meant to help control short-term interest rate. “Markets are not aware of this, but Asia will now start fretting,” said Ramanathan in Kuala Lumpur. “I expect much of Asian FX will be under pressure and structurally weak economies will remain in trouble,” he said, adding the rupiah and the Indonesian rupee may suffer more. Last week, most emerging Asian currencies rose after the Fed’s shock decision to maintain its bond-buying programme. But regional units gave up some of the gains this week on uncertainty over whether the US central bank will start to dial back stimulus later this year. Won The won fell as offshore funds cut bullish bets in the South Korean currency and on weaker Seoul shares. Selling from offshore funds came amid increased caution that the foreign exchange authorities may not allow the won to strengthen past 1,070 per dollar. The authorities had been recently spotted intervening to stem appreciation in the second-best performing Asian currency, according to traders. “Given offshore funds’ strong dollar demand, the won has room to weaken to around 1,090,” said a senior foreign bank trader in Seoul, referring to the won’s value against the dollar. Still, foreign investors extended a buying spree in the country’s main stock market to a 21 consecutive session, reversing earlier selling. Daewoo Shipbuilding & Marine Engineering Co Ltd 042660.KS said yesterday it had won a 572.8 billion won order to build a large jack-up rig for Denmark’s Maersk Drilling, causing expectations of more demand for the won. Ringgit The ringgit fell as offshore funds sold it and local interbank speculators joined the offers. Still, some investors looked to cover short positions in the Malaysian currency around 3.2400 per dollar. It has the 50.0 per cent Fibonacci retracement at 3.2395 of its appreciation between late August and earlier September. “I will not buy dollars here as the ringgit has reached our target,” said a senior Malaysian bank trader in Kuala Lumpur. — Reuters dlvr.it/41y1QP
Posted on: Wed, 25 Sep 2013 06:04:16 +0000
Trending Topics
Recently Viewed Topics
© 2015