Most emerging Asian currencies fell on Friday to pare weekly gains as worries about a slowing global economy dented risk appetite. The South Korean won rose on catch-up plays as the country's financial markets were closed on Thursday for a holiday when other regional units advanced.
Malaysia's ringgit eased ahead of the government's 2015 budget announcement later in the day. The Philippine peso weakened with data showing August exports grew at the slowest pace in three months. Asia-Pacific stocks outside Japan lost 1.5 percent after weak German export data boosted worries that a recession in the Europe's largest economy may hurt global growth. CBOE volatility index, a gauge of investor anxiety, rose to its highest since early February.
"Risk appetite is being reduced and the equity markets are bearing the brunt," said Christy Tan, Head of Markets Strategy for National Australian Bank in Hong Kong. "The bias is USD/Asia move higher, but some may be cushioned by carry, for instance the INR," said Tan, referring to the Indian rupee. The won and the Indonesian rupiah will be more vulnerable, she added.
Most emerging Asian currencies have risen so far this week as minutes from the Federal Reserve's latest policy meeting eased concerns that the US central bank may raise interest rates faster than expected. Singapore's dollar has advanced 0.9 percent as investors sought relatively safer assets in emerging Asia and saw its recent weakness as excessive. Last week, the city-state's currency suffered a fifth consecutive weekly depreciation.
The rupee has gained 0.7 percent against the dollar so far this week on foreign fund buying of local bonds. The Thai baht has strengthened 0.3 percent, while the ringgit has risen 0.2 percent. The won and the rupiah bucked the regional appreciation. The won has lost 0.7 percent amid expectations that South Korea's central bank may cut interest rates on October 15.
The rupiah has fallen 0.2 percent, which would be an eighth week of depreciation in a row. That would be the longest weekly losing streak since early September 2012. The ringgit fell as investors booked profits after hitting a near three-week high in the previous session. The currency pared some of earlier losses after data showing Malaysia's industrial production in August rose 6.5 percent from a year earlier, higher than expectations. Investors were keeping an eye on the country's 2015 budget announcement with hopes that the government will reform its fuel subsidy regime to further reduce subsidies, after administered prices for fuel and a cheaper grade of gasoline were increased earlier this month.
Comments
Comments are closed.