The Indonesian rupiah fell on profit-taking on Friday as investors took advantage of its recent rally and the dollar's lingering strength, while the Malaysian ringgit followed the euro lower. The euro pared some losses against the dollar after hitting a one-week low on Thursday after bleak US jobs data revived concerns about the global economy.
RUPIAH: The high-yielding rupiah dropped 1 percent to 10,300 per dollar. It later recovered to 10,220 and was little changed after the central bank cut its benchmark interest rate by 25 basis points to 6.75 percent, as expected. "Dollar/rupiah is biddish," said a dealer in Jakarta. "Offshore is squaring (rupiah) positions as we are heading to the weekend and the election." Some traders suspected mild central bank intervention by selling dollar to support the rupiah.
The rupiah, the best performing currency in Asia so far this year, has rallied about 17 percent since early March as money flowed in amid tentative signs of a global economic recovery. Six-month offshore dollar/rupiah NDFs rose to 10,605, implying a 3.5 percent rupiah fall from the spot compared to 3.3 percent on Thursday. The NDFs traded 10 points below onshore forwards, narrowing from 45 points on Thursday and 185 points on Wednesday.
SINGAPORE DOLLAR: The Singapore dollar rose 0.3 percent to 1.4505 per US dollar as investors bought the currency after a sell-off overnight spurred by the US dollar's broad gains. "Some stops on Singapore dollar overnight after the euro's move sent US dollar/Singapore dollar up to 1.4560," said a trader in Singapore.
"But those who were long on US dollars are now taking profit and selling it back down to 1.4520," the trader added. Analysts believe the scope for the Singapore dollar to rise in the near term should be limited amid persistent worries over central bank intervention to curb its strength as the island's economy is still in recession. The Singapore dollar has gained 7 percent since early March.