Most Asian currencies weak, rupiah drops
Most Asian currencies weak, rupiah drops
SINGAPORE (Reuters): Asian regional currencies got off to a mostly softer start after the long holiday weekend with the market still worried about social unrest in Indonesia and a weak yen, dealers said on Tuesday.
But India provided some distraction from the ongoing regional problems after it carried out a series of underground nuclear tests on Monday. Leaders from around the globe condemned the act with the U.S. and Japan threatening sanctions.
Japan said it was considering freezing yen loans and grants of aid to India.
But analysts played down fears that potential economic sanctions would seriously hurt the economy given India's external sector was only around 12 percent of GDP. Exporters would however be vulnerable.
The rupee opened sharply weaker against the forward dollar in volatile trade on fears foreign capital inflows would dry up but spot was steady at 39.775/780 per dollar at 0817 GMT compared with yesterday's close at 39.740.
The Taiwan dollar also weakened against the background of good demand for U.S. dollars on the non-delivery forward market.
The Thai baht inched down but tight liquidity offshore continued to support the spot rate.
The Singapore dollar slipped after a J.P. Morgan research report said the economy faced the threat of a recession this year.
Dealers also attributed part of the decline to a survey in a local newspaper, which said Singapore companies were slashing investment budgets this year because of an unexpected slowdown in sales.
The Malaysian ringgit bucked the regional trend and recovered early losses to stand stronger by late trade although there were few fresh factors to influence sentiment and trading was largely confined to position adjustment.
The ringgit is expected to trade in a 3.80 to 3.90 ringgit range in the near-term.
The Philippine peso surged following a relatively peaceful presidential election in the Philippines. While at least eight people were killed in polling day clashes, violence was well down from past elections. But traders said the market was still cautious at least until after the ballots have been counted.
The Korean won reversed its slide in late trade but the topside is seen capped by general concerns about the economy after rating agency Moody's downgraded the debt ratings of 19 Korean banks at the weekend.
A senior finance ministry official said the won's value was unlikely to change much from the current levels despite "various sources of instability" including Indonesia.