Advertisement

Most Asian currencies weaken as North Korea concerns ease

Font Size

MOST ASIAN currencies weakened on Tuesday as the US dollar strengthened for a second day as Hurricane Irma proved not as destructive as first feared and anxiety over North Korean weapons tests receded.

The dollar held on to gains after Hurricane Irma was downgraded to a tropical storm early on Monday, while risk appetite recovered after North Korea opted not to fire missiles or test nuclear weapons on Saturday as some had feared.

Investor focus has also shifted to a batch of data from the United States due later this week.

The easing of concerns over North Korea pushed up South Korean equities and the won, which was among the few gaining currencies in the region.

South Korea’s benchmark KOSPI stock index rose about 0.2% in tandem with broader Asia shares excluding Japan.

The won was about 0.2% firmer, after closing slightly weaker in the previous session, helped by the United Nations Security Council unanimously stepping up sanctions against North Korea on Monday, imposing a ban on the country’s textile exports and capping imports of crude oil.

Meanwhile, the dollar rebound reflected in the People’s Bank of China lowering its official yuan midpoint to 6.5277 per dollar, snapping 11 days of stronger fixings.

The yuan was 0.3% lower after it weakened above the psychologically important level of 6.5 in the previous session when the Chinese central bank relaxed controls on capital outflows.

Markets in the Philippines were closed after the government suspended financial trading because of flooding.

RINGGIT AND RUPIAH
The ringgit and the rupiah were about 0.2% and 0.4% weaker as the currencies consolidated on the back of gains in the past few sessions.

The ringgit, which weakened marginally in the previous session, had risen close to 2% over last week, while the rupiah had strengthened more than 1% over the same period.

The rupiah was at its highest level against the dollar in 10 months on Monday.

“The Indonesian rupiah still looks pretty solid,” said Andy Ji, Asia currency strategist at Commonwealth Bank of Australia.

“It looks pretty good because current account has improved so much, which is a big plus, and capital inflows into the local market have been solid the whole year.”

Mirza Adityaswara, Indonesia’s central bank deputy governor, said on Monday that the country expected post a balance of payments surplus of $9 billion this year, higher than forecast earlier but less than 2016’s surplus. — Reuters

Advertisement