Asian monies down on stocks, S'pore GDP

Asian monies down on stocks, S'pore GDP

Nirmala Menon, Dow Jones, Singapore

Disappointing economic growth data from Singapore Thursday and plummeting share prices spooked Asia's currency markets and sent the Singapore dollar back to levels unseen since mid-June.

Regional stock markets were roiled after the Dow Jones Industrial Average plunged to five-year lows overnight.

South Korean stocks were the biggest casualty of the day, as the key index plunged 5.8 percent to an 11-month low, and dragged the won to its weakest levels since mid-May.

"There's a bit of contagion from a combination of (falling) regional stock markets and bad numbers from Singapore," a currency trader at a Singapore-based European bank said.

Singapore's third-quarter gross domestic growth data, the first to be issued in Asia, raised fears of another recession and adds to existing uncertainties about the U.S. and the broader global economy, analysts said.

The city state's GDP grew by 3.7 percent on year in the third quarter - far short of the average 6.5 percent predicted in a Dow Jones Newswires poll - and shrank 10.3 percent on an annualized basis quarter-on-quarter, according to advance estimates issued by the government.

"Singapore's data suggests softening growth in Asia and that's worrying, as reflected in the currency market, said Chong Hui Chin, currency strategist at J.P. Morgan Chase Bank.

Late in Asia, the dollar was quoted around S$1.7932, up from S$1.7893 late Wednesday.

The dollar is expected to extend its gains against the Singapore dollar overnight as overseas market participants try to cover their short positions, traders said.

In South Korea, the dollar ended at 1,257.8 won, slightly below its intraday peak of 1,259.1 won, but sharply up from 1,246.6 won at the previous close. This was the won's weakest finish since May 17.

Domestic banks stepped up their dollar buying to cover previous short positions as the U.S. currency advanced, a trader at South Korea's Woori Bank said.

A regional currency trader at a European bank in Singapore said a number of market players had bet that the Bank of Korea would hike its key interest rate Thursday, and had built up short-dollar positions.

But these players had to scramble to cover their positions when the central bank left rates unchanged, he said.

Foreign investors who sold South Korean shares heavily this week also joined in the dollar buying spree, traders said.

In Thailand, news that Fitch Ratings has revised the outlook on the country's sovereign ratings to positive from stable sparked an initial dollar sell-off as market players viewed it as a sign the economy is strengthening, traders said.

But the selling was short-lived and the dollar soon resumed its uptrend amid generally negative sentiment toward Asian currencies.

Late in Asia, the dollar was quoted around 43.795 baht, up from 43.745 baht at the Asian close Wednesday.

The Philippine peso also weakened slightly in tandem with its regional counterparts.

The dollar ended at 52.725 peso on the Philippine Dealing System, up from 52.700 peso Wednesday.

The Indonesian rupiah fell as local companies bought dollars to repay debt and fund imports.

The dollar ended at Rp 9,005, up from Rp 8,998 Wednesday, and also above its opening level of Rp 9,000.

Traders said the central bank wasn't active in selling dollars Thursday.

Taiwan's financial markets were closed for a public holiday.