Currencies slip on sellout buzz

ASIAN CURRENCIES ROUND-UP

Asian currencies fell on speculation overseas investors are selling the region's shares to reduce holdings of riskier assets.

Stocks slid last week in the US, one of the biggest buyers of Asia's goods, leading to losses today among share markets including Singapore and Japan. Philippine central bank Governor Amando Tetangco and South Korea's Vice Finance Minister Kim Seok Dong last week both expressed concern over their currency's gains.

"Everyone is watching US stocks and that's important to Asia,'' said Philip Wee, a senior currency economist at DBS Bank Ltd in Singapore. ``The US is seen as a big source of demand for exports.''

The rupiah slipped 0.1 per cent to 9,070 as of 3 pm. in Jakarta and the peso dropped 0.2 per cent to 44.815. The South Korean won fell from the highest this year to 915.20 per dollar.

Overseas investors were net sellers of shares in South Korea today, according to stock exchange data. Figures weren't available for other Asian markets. The Morgan Stanley Capital International Asia Pacific Index of regional shares fell 0.5 per cent.

Appetite for risk has diminished on concern the US economy will slow due to losses from subprime mortgages. Hedge funds, including two run by Bear Stearns Cos., have suffered losses on securities backed by subprime mortgages. Moody's Investors Service and Standard & Poor's have cut ratings on the bonds.

Gained a Lot
"The risk is that the US sub-prime mortgage woes could be spreading,'' said Thomas Harr, a senior foreign exchange strategist at Standard Chartered Plc in Singapore. Risk appetite in Asia is ``a little bit more cautious.''

Tetangco said after markets closed on July 20 that ``the rapid pace of appreciation is of some concern since this tends to increase volatility.''

Korea's Kim said July 19 the currency has gained a lot,'' and the share market had risen at a ``drastic'' pace. Separately, China, the region's second-biggest economy, raised interest rates July 20 for the third time since March to cool the fastest pace of economic growth in 12 years and restrain inflation.

Elsewhere, the Thai baht dropped 0.2 per cent to 33.71 per dollar. Finance Minister Chalongphob Sussangkarn said the baht stabilized and moved in the right direction last week after the government announced measures to curb the currency's gains.