Most Asian currencies fell on Friday as investors took profit from in the previous day's rally amid lingering fears of a global recession, while companies bought more dollars for month-end settlements. A rally in Asian currencies on Thursday turned out to be short-lived as Asian most stock markets failed to keep momentum from the previous session.
"Interest to re-establish long dollar positions is coming back," said Han Sia Yeo, currency strategist at Bank of America. The volatile Indonesian rupiah steadied near 10,750 per dollar on Friday - virtually flat from Thursday's close - after losing as much as 5 percent to 11,400 in early trade.
The rupiah's earlier fall may also be related to a surge in corporate dollar demand at the end of the month, traders said, adding they saw no clear sign of central bank intervention to support the local currency. The rupiah's thin volume may be behind its volatility, dealers said.
"The interbank spread was 100-200 rupiahs, which reflected the poor spot market liquidity," said another trader. The South Korean won briefly touched 1,289.9 per dollar, down 3 percent from Thursday's domestic close. But it later cut losses as local stocks crept up.
The won is still down nearly 28 percent against the dollar so far this year despite recent gains. The Singapore dollar lost 1 percent to 1.4849 per US dollar, a day after it hit a two-week high in tandem with other regional units supported by a round of interest rate cuts by central banks around the world to ward off a global recession.
"There has been some profit-taking from those who were long yesterday below 1.4700," said a trader in Singapore. Far this year despite paring some losses in recent sessions. The Philippine peso lost about half of a percent to 48.97 per dollar.
But the Indian rupee bucked the region's weakness, hitting a one-week high at 49.23 per dollar. Meanwhile, the cost of borrowing dollars in Asia fell for the third straight day on Friday, as central banks around the world step up efforts to unlock credit and infused confidence in financial markets. The easing in dollar crunch may help Asian currencies to some extent, but selling pressures could persist in the near-term amid the global financial turmoil, analysts say.