Asia FX China stock woes hurt Asia FX, Vietnam devalues currency again

by **Cals** Wed 19 Aug 2015, 19:11

Asia FX
China stock woes hurt Asia FX, Vietnam devalues currency again

SINGAPORE (Aug 19): Most emerging Asian currencies eased on Wednesday, hurt by a continuing rout in China's stock markets, while jitters grew before U.S. inflation data and minutes of the Federal Reserve's last policy review are published.
China shares dropped again, extending Tuesday's 6 percent loss, as investors dumped shares across the board amid deepening worries that the government could be phasing out its rescue efforts. The yuan also slid, while broadly flat official guidance checked its downside.
The Vietnamese dong fell on the unofficial market after the country devalued the currency for the third time this year to support exports.
Malaysian's ringgit stayed around a pre-peg 17-year low in slow trade on weak commodity prices.
The Thai baht hit a six-year trough as foreign investors on Tuesday reported their largest stock selling in more than 1-1/2 years after a bomb blast on Monday.
"Tumbling Chinese stocks, along with the Fed's rate increase expectations, could spur capital outflows further from emerging Asia amid growing concerns over sluggish economies," said Yuna Park, a currency and bond analyst at Dongbu Securities in Seoul.
Investors were awaiting U.S. July consumer inflation data and minutes of the Fed's July policy meeting to gauge if the U.S. central bank will raise interest rates as soon as next month.
RINGGIT
The ringgit started the day firmer as the dollar broadly eased against a basket of six major currencies on position adjustments.
The Malaysian currency, however, turned weaker to touch 4.1075 per dollar. That compared with Friday's low of 4.1500, its weakest since Sept 1. 1998. Malaysia pegged the ringgit at 3.8000 from September 1998 until 2005.
Crude prices resumed their slide, highlighting concerns over export performance. Malaysia is a major supplier of natural liquefied gas and palm oil.
Malaysia's consumer prices rose 3.3 percent in July from a year earlier, faster than expected.
Still, thin liquidity kept investors from taking fresh positions.
A senior Malaysian bank trader said currency trading volume shrank to about 20 percent of past levels.
BAHT
The baht eased 0.2 percent to 35.625 per dollar, its weakest since April 2009.
Foreign investors on Tuesday sold a net 6.9 billion baht ($193.7 million) worth of Thai shares, the largest daily selling since December 2014.
The selloff followed the explosion in Bangkok which killed 22 people, spurring fears the attack will hurt tourism, one of the few bright spots in the economy.
RUPIAH
The rupiah edged down as local and foreign banks sold it amid lower government bond prices.
The Indonesian currency pared much of its earlier losses as the central bank was spotted intervening to support the currency, traders said.
On Tuesday, Bank Indonesia deputy governor Perry Warjiyo said the central bank is "desperately defending" the rupiah in the market.
The monetary authority will tighten controls on the purchase of the dollars over the counter, said Governor Agus Martowardojo, in a move to stabilise the second-worst performing Asian currency so far this year.