SINGAPORE: The Indonesian rupiah fell on Wednesday as a weak debt auction spurred bond outflows, while the South Korean won and the Taiwan dollar gained on exporters' month-end demand.
Still, most emerging Asian currencies moved in tight ranges as investors hesitated to make big bets before Friday's Jackson Hole meeting of central bankers where Federal Reserve Chairman Ben Bernanke is set to make a speech that may hint at another monetary easing package or QE3.
The spot rupiah shed 0.2 percent to 9,550 against the dollar as foreign banks bought greenbacks after the finance ministry on Tuesday sold 3.84 trillion rupiah ($402.73 million) worth of government bonds in a debt auction -- below its target of 6.00 trillion rupiah. Local oil companies also purchased dollars, dealers said.
Rupiah forwards also slid with one-month rupiah non-deliverable forwards (NDFs) against the dollar and one-year NDFs hitting near three-month lows.
One-month NDFs weakened as much as 0.5 percent to 9,650 and one-year NDFs slid 0.6 percent to 10,190, both the weakest since June 1.
"People are still the most nervous about Indonesia. There have been a lot of inbound investments from 2009 to 2011. So, people are worried about investor exits," said a senior US bank trader in Singapore, adding the rupiah will keep underperforming its Asian peers.
The trader expects the spot rupiah to weaken to 9,700 per dollar by the end of this year.
The Indonesian rupiah has lost 5.1 percent to the greenback so far this year, becoming the worst-performing emerging Asian currency, according to Thomson Reuters data, amid worries about outflows from the Southeast Asia's top economy and widening trade deficit.
The weakness came even as the central bank has intervened to support the local unit.
But some dealers said Bank Indonesia was seen allowing a weaker rupiah to support exports, if the slide is not too sharp, adding the central bank did not keep it stronger than 9,500.
BI had recently intervened in the currency market to prevent the local unit from weakening past 9,500, according to traders in Jakarta.
"It seems like BI is letting the rupiah to find a new equilibrium above 9,500 for exports," said a Jakarta-based dealer.
In June, Indonesia's exports saw their biggest drop in nearly three years on softer Chinese demand, causing the trade deficit to widen to its largest in more than a decade.
TAIWAN DOLLAR
The Taiwan dollar gained on inflows from foreign financial institutions and as the island's exporters bought it for month-end settlements.
Domestic importers also purchased US dollars for payments, limiting the local unit's strength, dealers said.
WON
The won gained on exporters' month-end settlements and as the euro steadied near its seven-week peak.
But the South Korean currency could not extend gains as investors were reluctant to build up bullish positions before the Jackson Hole meeting.
Foreign investors were also net sellers in Seoul's main stock market.
PHILIPPINE PESO
The Philippine peso fell as interbank speculators covered dollar short positions before the Jackson Hole meeting.
The peso may weaken further if traders adjusted such bets more, some dealers said.
But investors also hesitated to add bearish bets on the Philippine currency with some buying the local unit around 42.40, dealers in Manila said.
SINGAPORE DOLLAR
The Singapore dollar was barely changed despite a higher euro as model funds and leveraged account sold the city-state currency.
Investors looked to sell the Singapore dollar around 1.2510 per US dollar, dealers said.
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