The Philippine peso and Singapore dollar led the losses in Asia on Wednesday as investors
extended their aggressive sales of risky assets on fears U.S. credit market woes were spreading overseas.
The high-yielding peso fell 0.7% to 46.2 against the U.S. dollar, a five-week low, while the Indonesian rupiah, another high-yielder, fell to 9,402 against the U.S. dollar, its weakest point since June 2006. The Singapore dollar fell more than half a percent to past 1.53 against U.S. dollar.
"Currently, we're having a bit more of a pressure on the Asian currencies as a result of base dollar strength, not so much against the yen but more so against European currencies," said
Thio Chin Loo, currency strategist at BNP Paribas. "It's just a symptom of unwinding of risk across the board and this as well has affected Asian currencies," she added.
The selling was indeed seen across the board. Most Asian stock markets were sharply lower.
The euro fell to a six-week low against the dollar, the New Zealand dollar fell to a 10-week low and the Taiwan dollar fell to its lowest level in nearly 2 months as declining stocks looked set to cause more foreign fund outflows. The Malaysian ringgit hit 3.49 against the dollar, its weakest
since the end of June.
The flow of bad news from credit markets also would not abate. Concerns grew after a U.S. investment firm wanted to halt redemptions on Tuesday and a Canadian trust couldn't find funds to repay some short-term debt.
Wal-Mart, the world's largest retailer, cut its profit forecast, and Swiss Bank UBS warned that market turmoil was likely to hit its investment banking business.
"We continue to see price action driven primarily by crisis management and position liquidation rather than active decision making," said Bank of America strategist Christy Tan. "We're still in the midst of a deleveraging environment," she said.