Most emerging Asian currencies slid on Thursday as growing tensions over Ukraine and surprisingly weak Australia's job data hurt risk sentiment, while the Chinese yuan extended gains, helping units in Northeast Asia pare some losses. The Philippine peso hit a seven-week low as the World Bank cut its growth forecasts for the economy this year and the next. Indonesia's rupiah fell on local corporate dollar demand. The Malaysian ringgit and the South Korean won followed a weaker Australian dollar.
The Aussie fell to a near two-month low after data showed Australia's jobless rate jumped to a 12-year high in July, reviving some expectations of another rate cut. The yuan, however, rose past the midpoint for a second day as investors added bullish bets on the currency due to a stabilising economy. That helped Taiwan dollar and the won outperform most regional currencies as Taiwan and South Korea are seen more linked to China's economy than Southeast Asian peers, analysts said.
Northeast Asia was also seen benefiting more from a solid US economy, they added. "I am beginning to like Northeast Asian currencies versus SEA currencies," said Jonathan Cavenagh, senior FX strategist with Westpac in Singapore, referring to Southeast Asia. The peso lost as much as 0.6 percent to 43.970 per dollar in heavy trading, its weakest since June 18, as offshore funds sold it amid lower government bond prices.
The 10-year bond yield rose to 4.246 percent, its highest since May 21. Local companies such as exporters bought the peso, but this corporate demand did not obscure bearish views on the Philippine, currency traders said. A senior Philippine bank trader expected the peso to weaken to 44.150 with a 200-day moving average at 44.145. It has been stronger than the average since May 9.
The official Jakarta Interbank Spot Dollar Rate, which Indonesia's central bank launched last year in an effort to manage exchange rate fluctuations, was fixed at 11,766 per dollar, weaker than the previous session's 11,756. The Taiwan dollar rose in active trading as local exporters bought it around 30.000 for settlements, traders said.
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