Most Asian currencies softened against the dollar on Thursday, with the Korean won leading declines, as wary investors dashed to safer assets amid deepening global growth risks. The won weakened as much as 0.9 percent at one point to 1,128.40 per dollar, its lowest in two weeks, before paring some losses.
Aggravating worries about cooling global growth, Apple Inc on Wednesday issues a rare revenue warning and cut its quarterly sales forecast, citing slowing growth in emerging markets and weak sales in China. The news helped trigger a 'flash crash' in currency markets, with the Japanese yen soaring 1.6 percent versus the greenback, which has been hobbled by a US government shutdown.
"Emerging market currencies weakened amid intensified risk aversion," said Qi Gao, FX Strategist (EM Asia) at Scotiabank. "The yen rallied as it is a traditional safe-haven currency." On Wednesday, data showed weaker factory activity across much of Asia in December as the Sino-US trade war dampened export demand.
The Taiwan dollar and the Indian rupee fell 0.3 percent each, while the Chinese yuan and the Malaysian ringgit were marginally weaker. Elsewhere, the Philippine peso ticked down ahead of inflation data due on Friday. Inflation is expected to slow to a six-month low in December on easing food and fuel prices, a Reuters poll showed, raising the chances of the central bank leaving interest rates unchanged this year.
Bangko Sentral ng Pilipinas left its key rate on hold in December after five successive rate hikes. The rupiah was marginally lower versus the dollar after December inflation cooled. Bank Indonesia has less need to hike rates again given that inflation appears well-contained and dollar weakness is taking pressure off the rupiah, Mizuho Bank said in a note to clients.
The central bank governor said on Wednesday that he expects the rupiah's exchange rate to be more stable this year compared with 2018. Last year, the rupiah plunged to its weakest since the Asian financial crisis 20 years ago, before recovering towards the end of the year on increased capital inflows.