Most emerging Asian currencies slid on Wednesday as investors cut holdings in risky assets due to fresh doubts over Greece's bailout, with the Indonesian rupiah hurt also by a weak debt auction. The renewed Greek concerns pointed to more corrections for emerging Asian currencies, dealers and analysts said.
"I don't think Asian currencies have priced in risk aversion flows for the Greek PSI as most investors expect Greece to survive this year," said Saktiandi Supaat, head of FX Research at Maybank in Singapore. The rupee and the rupiah underperformed other emerging Asian currencies, each losing 0.5 percent against the dollar.
The Singapore dollar was the best performer among emerging Asian currencies with a 0.3 percent gain versus the greenback as European names bought the city-state's currency on a rebound in the euro. Dollar/rupiah rose after a weak Indonesian debt auction on Tuesday and on global risk aversion. "The result was not completely a surprise as caution has prevailed in the bond market due to the inflation story," said Gundy Cahyadi, an economist at OCBC Bank in Singapore.
Dollar/won rose, although South Korean exporters took the gain as a chance to sell the pair, cutting its gains. Offshore funds joined the selling. In the afternoon, Finance Minister Bahk Jae-wan also said exchange rate fluctuations in the won were having a greater impact on domestic inflation than on foreign trade.
"The market is stuck in a range between 1,115 and 1,130. That's what the FX authorities want, I think," said a senior foreign bank dealer in Seoul. Dollar/Philippine peso advanced on demand from interbank speculators as global risk aversion hit Philippine stocks.