HEADLINES
Most emerging Asian currencies skidded lower on Wednesday as the dollar climbed to a seven-year high against the yen, buoyed by higher US Treasury yields on a more bullish outlook for the world's top economy. Malaysia's ringgit hit a near five-year low as a rebound in oil failed to ease concerns over the impact of lower crude prices on the country, a net oil exporter and major palm oil producer.The Indonesian rupiah touched 12,298 per dollar, its weakest since December 2008, amid the global financial crisis, on local corporate dollar demand. South Korea's won tracked the yen's slide. The dollar index, a gauge of the greenback's performance against six major currencies, stayed around 4-1/2- year high, on stronger US bond yields. The dollar was supported by comments earlier this week from New York Fed President William Dudley and Vice Chair Stanley Fischer who both provided a mostly rosy outlook for the US economy. "Asia FX will stay weaker as everybody agrees on a strong dollar trend," said Jeong My-young, Samsung Futures' research head in Seoul."We may see some profit-taking from the dollar, but it is hard to reverse the trend unless US economic data is bad or other economies show a solid picture of health." The ringgit lost as much as 0.5 per cent to 3.4420 per dollar, its weakest since February 2010. Kuala Lumpur stocks lost 0.8 percent, well underperforming other Southeast Asian peers. The Malaysian currency pared some of its earlier losses as the central bank was suspected of intervening to limit its downside, traders said.Oil rebounded more than 1 per cent with US crude for January rising to $67.97 a barrel earlier in the day, but investors stayed concerned about Malaysia's weakening growth due to lower oil prices. Credit Suisse said Malaysia's economic growth in 2015 would be lower than the bank's forecast of 4.8 per cent and next year's budget deficit target of 3 per cent could be more difficult to achieve if oil price were to stay at $70. "At current oil price levels, we think MYR could depreciate past 3.55-3.60 before it represents a bigger risk to BNM's inflation outlook," Credit Suisse said in a client note, referring to
Malaysia's central bank, Bank Negara Malaysia.
Rupee falls; Asia majors hit as dollar rallies
The pair was steady at 61.89 compared with Tuesday's close of 61.88/89. Strong dollar hurt Asia FX; many at multi-year lows now. NSE index was almost flat. Sentiment was buoyant after RBI said it could ease monetary policy early next year. Traders are confidence about local economy supporting rupee even as other Asian currencies take a hit.
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