The Malaysian ringgit fell to seven-week lows on concerns about the global economy, while risk aversion also pressured the Indonesian rupiah in offshore markets, even as President Susilo Bambang Yudhoyono looked set for a re-election. Asian stocks fell while the yen firmed against dollar and euro as, traders bet that a pull-back in riskier assets would provide the impetus for a further rise in the Japanese unit.
Markets in Thailand remained closed for a holiday while those in Indonesia were shut for the presidential election.
RUPIAH: On offshore markets, dollar/rupiah non-deliverable forwards (NDFs) edged up amid doubts about the strength of a global economic recovery following bleak US jobs report and comments that a second US stimulus package may be necessary.
"Dollar/rupiah is a little higher because of the general risk aversion sentiment," said a dealer in Singapore. Six-month NDFs rise to 10,670 from Tuesday's close at 10,598, when they implied a 3.8% rupiah fall from the spot. Incumbent President Susilo Bambang Yudhoyono is tipped to be re-elected, early exit polls showed, pointing the way to quickening economic reforms in Southeast Asia's largest economy.
The spot rupiah ended near 10,200/USD on Tuesday and the market expects it to rally if Yudhoyono wins the election in the first round. The high-yielding rupiah, the best performer in Asia, has gained nearly 8 percent against the dollar so far this year.
RINGGIT: The Malaysian ringgit lost half of a percent to 3.5630 per dollar, a 7-week low, as risk aversion rose while the dollar firmed against euro. "Dollar/ringgit is up on the back of stronger dollar/Asia," said a Kuala Lumpur-based trader. "The market is quiet, watching if euro breaks below the $1.3850-80 support."
Meanwhile, one-year offshore dollar/ringgit NDFs rose to 3.577, implying a 0.4 percent ringgit fall from the spot, unchanged from Tuesday. The one-year NDFs trade 8 pips below onshore forwards compared to 95 pips a day earlier.
Patrick Bennett, currency strategist at Societe Generale, suggested investors should go long on dollar against several Asian currencies, including the ringgit, Singapore dollar and Philippine peso. Recent developments, including weakening Asian stocks, slowing portfolio inflows and a pick-up in central bank intervention to curb currency strength, pointed to near-term weakness in most Asian currencies, he said in a note.