Singdollar falls as China rate cut, growth concerns hurt Asian currencies

The Singapore dollar and most emerging Asian currencies dropped on Monday as China's interest rate cut underscored expectations that regional peers may join, easing to cope with a global economic slowdown. -- PHOTO: REUTERS
The Singapore dollar and most emerging Asian currencies dropped on Monday as China's interest rate cut underscored expectations that regional peers may join, easing to cope with a global economic slowdown. -- PHOTO: REUTERS

SINGAPORE (Reuters) - The Singapore dollar and most emerging Asian currencies dropped on Monday as China's interest rate cut underscored expectations that regional peers may join, easing to cope with a global economic slowdown.

Regional currencies also came under pressure as the US dollar broadly extended gains with the euro's weakness ahead of key talks between Greece and eurozone finance ministers on the country's debt issues.

The Singdollar fell as macro funds and interbank speculators sold the unit. It weakened past a technical support of 1.3343 per US dollar, and was trading at US$1.3354 as at 2:05pm, down from its Friday close of $1.3303.

Thailand's baht slid to as low as 33.58 per US dollar, its weakest since October 2009 after foreign investors were net sellers in the local stock market in the last two weeks, dumping a combined net 9.6 billion baht in shares.

Offshore funds unloaded South Korea's won while Malaysia's ringgit edged down, even though stronger-than-expected March industrial output helped the currency briefly turn firmer.

The Indian rupee bucked the regional trend on strong local shares.

The People's Bank of China on Sunday cut interest rates for the third time in six months to support the world's second-largest economy.

"I don't see this necessarily as positive for Asian currencies. The market will see the China rate cut as continuing the policy easing in the region," said Khoon Goh, senior foreign exchange strategist for ANZ in Singapore.

Emerging Asian currencies did not react much to April US jobs data as non-farm payrolls increased 223,000, roughly in line with forecasts. The March figure was significantly downward revised and wage growth was also softer than expected.