Asia currencies dented by jitters over Ukraine, China worries: Reuters Most Asian currencies slipped against the dollar on Friday as renewed jitters over heightened tensions in Ukraine and worries over an economic slowdown in China curbed investors appetite for riskier assets. The daily losses were led by the Indian rupee, which pulled away from a seven-month high versus the dollar set earlier in the week, followed by the Malaysian ringgit. Crimea risk is very real ... Only the foolhardy will short dollar/Asia this weekend, said a trader for a Malaysian bank in Kuala Lumpur. Russia launched new military exercises near its border with Ukraine on Thursday, showing no sign of backing down on plans to annex its neighbours Crimea region despite a stronger than expected drive for sanctions from the EU and United States. At the U.N. Security Council, the United States circulated a draft resolution that would declare illegal Sundays planned referendum on independence for Ukraines Crimea region. Many emerging Asian currencies were on track for weekly losses, after a recent batch of weak Chinese data added to worries about an economic slowdown in the worlds second-largest economy. There is obviously a good deal of risk to be imparted on markets depending on the events of the weekend in Europe, which may hang a bit more heavily considering the listless economic results out of China and the negative sentiment this has engendered in the region, Sacha Tihanyi, a senior currency strategist for Scotiabank in Hong Kong, said in a research note. Asian currencies have taken a hit this week after data showed Chinas exports unexpectedly tumbled in February, adding to fears of a sharper slowdown in the worlds second-largest economy. Weaker-than-expected Chinese data on retail sales, industrial output and fixed asset investment released on Thursday provided a fresh excuse for the market to be wary of embracing too much risk. INDONESIAN RUPIAH The rupiah eased 0.3 percent on the day to 11,410 versus the dollar. The official Jakarta Interbank Spot Dollar Rate (JISDOR), which Indonesias central bank launched last year in an effort to manage exchange rate fluctuations, was fixed at 11,421 rupiah per dollar, a weaker level for the rupiah than Thursdays 11,387. The latest Reuters survey of market positioning in Asian currencies showed that long positions in the rupiah rose to their largest level since May 2011, underscoring an improvement in market sentiment toward the rupiah. The rupiah has benefited recently as foreign investors brought money into Indonesias stocks and bonds, encouraged by the countrys improving economic fundamentals. On Thursday, Indonesias central bank left its key reference rate steady at 7.50 percent as widely expected, as inflation is manageable and the rupiah has strengthened significantly this year.
Posted on: Fri, 14 Mar 2014 06:03:05 +0000
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