Asian currencies ease

Asian currencies were steady to easier against the dollar on Friday, with the Singapore dollar pulling back from a record high, as investors turned cautious ahead of the release of European banks' stress test results later in the day. The Singapore dollar earlier rose to as high as 1.2155 against the US dollar, matching a record high first struck on Thursday, but later lost steam, tracking the euro's drop against the dollar.
Elsewhere, the Indonesian rupiah dipped in the face of dollar demand related to local fixings, and the Indian rupee also retreated against the dollar. "Everyone is waiting to see what the EU will come out with, there is the bank stress test coming out. People are all waiting for those things to come out before they're willing to decide what the next move is," said Perry Kojodjojo, FX strategist for HSBC in Hong Kong.
In addition to the results of European banks' stress tests due later on Friday, investors are focusing on a possible summit of eurozone leaders next week. The implications for Asian currencies, if ratings agencies such as S&P were to actually downgrade the United States, are not clear cut, traders and analysts said.
"You will see a lot of choppy sessions for sure, and I think market will be very indecisive. But I don't see it as a risk-off event, but more people selling the dollar," said a trader for a European bank in Jakarta. The dollar edged higher against the Indonesian rupiah, helped by dollar demand related to local fixings. Dollar/rupiah also drew support from broad firmness in dollar/Asia and a drop in the euro against the dollar. The dollar rebounded against the Singapore dollar after matching a record low earlier on Friday.