The South Korean won and Philippine peso fell on Monday as investors fretted about the impact of high oil prices on their economies, while most other Asian currencies moved in tight ranges. The peso fell by 0.3 percent to 44.93 per dollar, its lowest level since October 2007, after oil hit a record high on Friday of $142.99 per barrel and stayed close to that level on Monday.
"I think today's movement is just a follow-through reaction from last Friday, with a lot of market players getting hit last week on the volatility (of the currency)," a trader in Manila said. "Towards the end of last Friday a lot of market players just scrambled to buy back the dollar/peso," he said. Traders said they expected the peso to move towards 45 per dollar in the near term and were watching for intervention from the authorities to support the currency.
The Philippine central bank was suspected of intervening several times last week. The US dollar fell to a three-week low against the euro, weighed down by high oil prices, data showing US consumer sentiment hit a 28-year low and a dip in the Dow Jones industrial average.
Market players waited for more data this week on the health of the global economy, including the Bank of Japan's quarterly tankan survey of corporate sentiment, and for key events such as European Central Bank and Indonesian central bank meetings.
The South Korean won slid by almost half a percent to 1,046.25 per dollar from its previous close of 1,041.5 as investors worried about the impact of inflation on growth. "Risk aversion also killed some Asian currencies, given the tumble in the equity market, but the yuan is still strong," OCBC strategist Tommy Xie said.
The yuan hit a post-revaluation high at 6.8547 per dollar after the central bank set a stronger mid-point that reflected its stance of using the currency to fight inflation. The Singapore dollar rose 0.2 percent to 1.3602 per US dollar, its highest level in nearly a month. "Probably investors think the central bank will let the Singapore dollar strengthen slowly with inflation still high," a Singapore-based trader said.