Asian currencies were mixed on Friday, with the South Korean won reversing earlier losses in line with local stocks while the Indonesian rupiah fell amid persistent fears of a sharp global downturn. The won rose almost 2.8 percent to 1,294.8 per dollar, reversing an earlier loss of almost 3 percent and extending the recent streak of wild two-way swings.
Some dealers cited dollar-selling intervention by the authorities to support the won, while local stocks clawed back an early loss to turn positive after the Bank of Korea cut interest rates. It cut its benchmark interest rate by 25 basis points to 4 percent - the third straight cut in a month - to calm markets and shore up the economy.
The Singapore dollar gained almost 0.7 percent to 1.4917 to the US dollar, its highest since October 28. "I guess the market sold the US dollar as the Singapore dollar's NEER is overshooting to the downside... plus equities turning positive," said a trader in Singapore.
Singapore's central bank, which manages the currency's nominal effective exchange rate (NEER) within a secret band, eased its policy last month by shifting to a zero appreciation for the currency to spur economic growth as inflation eases.
But the high-yielding Indonesian rupiah fell to a one-week low at 11,135 per dollar as investors fretted about the falling global stocks. "What's so surprising? Dow fell 400 points," said a Jakarta-based trader, who said foreign investors seemed to be selling Indonesian bonds.
The Dow Jones industrial average tumbled close to 5 percent on Thursday as disappointing corporate outlooks and weak retail sales fuelled fears of a deepening economic downturn. Asian shares excluding Japan fell about 0.3 percent, paring earlier losses. Meanwhile, the Vietnamese dong hit a record low at 17,000 per dollar, a day after the central bank widened its trading band against the dollar to +/- 3 percent from +/- 2 percent - the third band widening so far this year.
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