SINGAPORE: Most emerging Asian currencies inched lower on Monday in subdued trading on growing worries about sluggish global growth, while sustained hopes for fresh measures from major central banks tightly limited their downside.
Investors hesitated to make big bets before data from developed markets such as US retail sales and consumer prices for July, as well as the euro zone's second-quarter gross domestic product figure on Tuesday. Growth in the single-currency area is expected to show a contraction.
Growth concerns may keep regional units under pressure, but the currencies could be underpinned by expectations for more policy action such as from the European Central Bank to ease the euro zone's debt crisis.
"Asian FX, however, seem to still be benefiting from the marginal pricing-in of the probability for strong central bank action from the Fed and ECB, as well as lower overall currency volatility," said Sacha Tihanyi, senior currency strategist for Scotiabank in Hong Kong.
Last week, most emerging Asian currencies rose on expectations that the Federal Reserve and other policymakers will take action to restore global growth.
Japan's economy grew just 0.3 percent in the second quarter, half the pace expected, data showed earlier, boosting expectations that policymakers in Tokyo will join stimulus moves.
SINGAPORE DOLLAR
The Singapore dollar softened 0.1 percent, trying to clear technical support at 1.2457 per US dollar, the tenkan line on the daily Ichimoku cloud chart.
The city-state's currency had been closing firmer than the tenkan line since July 13.
RUPIAH
The Indonesian rupiah edged down although the central bank late on Friday took steps to lure fresh foreign inflows.
Bank Indonesia raised its deposit facility rate, part of a policy move aimed at stabilising the rupiah currency and improving the country's current account deficit that doubled in the second quarter.
"The measure is to prevent the rupiah from falling further, not to lift it," said a Jakarta-based dealer, adding dollar demand from oil importers continued to put pressure on the Indonesian currency.
WON
Offshore funds and South Korean importers put pressure on the South Korean won, sending it to 1,132.7 per dollar.
But domestic exporters bought the local unit on dips, especially when it was weaker than 1,130, limiting its downside, dealers said.
Foreign investors also continued to buy Seoul shares with a 264.4 billion won ($233.90 million) net purchase. They have scooped up 3.5 trillion won in stocks during the recent six consecutive sessions, according to the Korea Exchange.
Still, some traders looked to sell the won, given a slowing global economy.
"I wonder how much further the won would fall. But it looks better to buy dollar/won below 1,130," said a senior foreign bank dealer in Seoul.
RINGGIT
The Malaysian ringgit dipped in thin trading on interbank speculators' selling.
A Malaysian bank dealer in Kuala Lumpur said the local currency may fall further this week as traders could cut long positions before holidays next week.
The country's financial markets will be closed on Aug. 20 and Aug. 21 to mark the Hari Raya Puasa holiday.
Comments
Comments are closed for this article.