The South Korean won and Indonesian rupiah fell in tandem with regional stocks on Thursday after comments by Federal Reserve chief Ben Bernanke stoked concerns about the US economy. The yen was near a 7-1/2-month high and Asian stocks slid after Bernanke's comments, as investors awaited for eurozone bank stress test results due on Friday.
The conclusion of the European Union examination of banks' financial strength is expected to show generally positive results, but investors are unclear about its potential market impact given Europe's shaky economic fundamentals. The won fell as much as 0.4 percent to 1,208.9 per dollar. But it later recovered to 1,204 - virtually flat from Wednesday's close - on local exporters' demand for settlements.
"The won finds support around 1,208 and 1,210 from exporters, but it is hard to buy it given weaker stocks and importers," said a foreign bank dealer. Another dealer said investors were reluctant to boost dollar-short positions despite exporters' deals as they remain wary of possible dollar-buying intervention by the foreign exchange authorities.
Seoul shares were down 0.36 percent but foreign investors remain buyers. Meanwhile, Credit Agricole Corporate Investment Bank said investors should sell the won on a slowing global economic recovery and risk aversion, targeting 1,265 per dollar. Analysts at the bank said in a research note that South Korea's high short-term foreign currency debt made it reliant on access to foreign capital.
The Indonesian rupiah shed a fifth of a percent to 9,080 per dollar in tandem with local stocks. The rupiah was seen supported by capital inflows despite renewed risk aversion. One-month dollar/rupiah NDFs inched up to 9,098 from 9,085 late on Wednesday. Indonesian stocks hit a record high on Wednesday as investors sought to cash in on the country's strong growth and political stability. Rupiah has gained 4 percent against the dollar so far this year but it's dwarfed by a 19 percent rally in local stocks.
The Thai baht eased a tad to 32.32 per dollar, tracking its Asian peers and defensive stocks, shrugging off strong exports data. "Bernanke's statement and the pending euro bank stress test results curb risk appetite. Even the bullish Thai export figure for June did little to stop the baht's slide," a Bangkok-based trader said. Thai exports rose for the eighth month in June, hitting a record $18.04 billion. The baht has gained just over 3 percent against the dollar this year.