TOKYO: The dollar rallied against emerging currencies in Asia Tuesday as Chinese trade data showing an import slump fuelled anxiety about slower growth of the region's largest economy.
The risk-off mood, fanned by a decline on Monday in crude oil prices, weighed especially on the Indonesian rupiah and the Malaysian ringgit.
The greenback advanced more than one percent against both units.
Dealers also sold the dollar against the yen, which is seen as a safe-haven currency in times of turmoil, as they sought refuge from riskier assets.
The move into safe assets follows a torrid July-September quarter that saw trillions wiped off stock valuations and the emerging currencies tumble.
Global markets went into meltdown in August after China devalued its yuan currency, fueling anxiety about the state of China's economy, while traders were also on edge over an expected US interest rate rise in 2015.
Many emerging market currencies saw some decent trade last week, with the ringitt and rupiah both having their best weekly performances in years.
But the latest China data appears to have soured sentiment once more.
"Asian trade has gone strongly risk-off," said IG's Angus Nicholson in a commentary. "Markets and currencies started to weaken from the open as nervousness about the Chinese data was heavy in the air."
Official figures showed Chinese imports slumped nearly 18 percent year-on-year in September, underscoring worries about the world's number two economy.
Exports also slipped 1.1 percent, hit by weakening demand in key markets for China's manufactured goods.
China is the top trader in goods and its manufactured items sell worldwide, so any drop off in its imports and exports is seen not only as a barometer of its own growth but also the state of the global economy.
In afternoon trade the rupiah dropped 1.27 percent, the ringgit fell 1.05 percent, the Thai baht declined 0.55 percent, and the Taiwanese dollar lost 0.43 yen. The resource-reliant Australian dollar retreated 0.62 percent.
Among other emerging units, the Singapore dollar, Philippine peso and South Korean won all retreated.
The dollar edged down to 119.84 yen from 120.02 yen on Monday afternoon in New York, while the euro slipped to 136.18 yen from 136.38 yen.
The single currency was flat at $1.1363.
Comments
Comments are closed for this article.