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EM ASIA FX-Rupiah leads Asia FX losses on oil, election worries
June 25, 2014 / 5:48 AM / in 3 years

EM ASIA FX-Rupiah leads Asia FX losses on oil, election worries

* Rupiah at over 4-month low on importers, dividend dlr bids
    * Ringgit down on dollar short-covering
    * Won falls on importers; Philippine peso slips on deficit

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, June 25 (Reuters) - The rupiah hit its lowest in
more than four months on Wednesday, pressured by worries about
Indonesia's current account deficit amid higher oil prices and
uncertainty over the coming presidential election.
    Most emerging Asian currencies also eased on expectations of
higher dollar demand for oil imports given worries that an
intensifying Iraq crisis will disrupt crude supplies from the
world's second-largest OPEC producer.
    The rupiah fell as much as 0.8 percent to 12,085
per dollar, its weakest since Feb. 13, on dollar demand linked
to dividend payments to foreign investors and as local importers
joined the bids. It also weakened in non-deliverable forwards
(NDFs) markets.
    Investors need to consider the possibility that frontrunner
Joko "Jokowi" Widodo could lose the July 9 Indonesian election,
wrote OCBC Bank economist Wellian Wiranto in Singapore.
    "Given that market has broadly positioned for a Jokowi
presidency, the immediate knee-jerk reaction to that potential
result could well be rather adverse, compounded by record-high
foreign ownership of sovereign bonds," Wiranto said.
    Foreign investors held 402 trillion rupiah ($33.3 billion)
worth of Indonesian government bonds as of June 16, about 36
percent of the total, according to government data.
    The official Jakarta Interbank Spot Dollar Rate was fixed at
12,027 per dollar, the weakest since that rate was
launched by Indonesia's central bank last year in an effort to
manage exchange-rate fluctuations.
    The rupiah's implied volatility has risen recently
with one-month volatilities up to 10.15 percent from
around 7.5 percent on June 13.
    In March, the rupiah was emerging Asia's strongest currency
in 2014, gaining 8 percent on hopes for a victory for Jokowi,
who had a reputation for good governance from his work as
governor of Jakarta. An improving trade balance and slower
inflation  also supported the currency.
    But the Indonesian currency gave up most of its gains after
parliamentary election in April, when Jokowi's party won a
smaller percentage of the vote than expected.
    Some opinion polls now show that Jokowi's once huge lead
over ex-general Prabowo Subianto has nearly disappeared, which
analysts say partly stems from smear campaigns against the
frontrunner. 
    
    RINGGIT
    The Malaysian ringgit fell as investors rushed to
cover short positions in the dollar.
    Dollar demand for the position adjustments intensified once
the ringgit weakened past 3.2200 per dollar, traders said.
    However, the ringgit found a chart support at 3.2312, a
55-day moving average, analysts said.
    The currency has been closing firmer than the average since
late March.
    
    WON
    The South Korean won eased as local importers
bought dollars for payments on growing geopolitical tensions in
Iraq. Interbank speculators added long dollar positions.
    The won pared some of its earlier losses as exporters lined
up to buy it for month-end settlements.
    
    PHILIPPINE PESO
    The peso eased as the country reported a wider
trade deficit in April than a year earlier.
    The Philippine trade deficit was $743 million, compared to a
gap of $647 million in April 2013. 
    The peso's NDFs also fell while the five- and
10-year government bond yields  rose.
    
    CURRENCIES VS U.S. DOLLAR
    Change on the day at 0535 GMT
  Currency    Latest bid   Previous day    Pct Move
  Japan yen       101.86         101.98       +0.11
  Sing dlr        1.2511         1.2493       -0.14
  Taiwan dlr      29.983         30.031       +0.16
  Korean won     1020.40        1018.40       -0.20
  Baht             32.45          32.42       -0.09
  Peso             43.95          43.86       -0.20
  Rupiah        12075.00       11985.00       -0.75
  Rupee            60.28          60.13       -0.24
  Ringgit         3.2260         3.2135       -0.39
  Yuan            6.2344         6.2315       -0.05
 
  Change so far in 2014
  Currency    Latest bid  End prev year    Pct Move
  Japan yen       101.86         105.28       +3.35
  Sing dlr        1.2511         1.2632       +0.97
  Taiwan dlr      29.983         29.950       -0.11
  Korean won     1020.40        1055.40       +3.43
  Baht             32.45          32.86       +1.26
  Peso             43.95          44.40       +1.01
  Rupiah        12075.00       12160.00       +0.70
  Rupee            60.28          61.80       +2.53
  Ringgit         3.2260         3.2755       +1.53
  Yuan            6.2344         6.0539       -2.90
    

 (Additional reporting by IFR Markets' Catherine Tan; Editing by
Richard Borsuk)

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