Singdollar, regional currencies fall as Trump win fuels trade concerns

People queue in front of a money changer at the Raffles Place business district in Singapore on Nov 9, 2016.
People queue in front of a money changer at the Raffles Place business district in Singapore on Nov 9, 2016. PHOTO: AFP

SINGAPORE - The Singapore dollar and other regional currencies slumped on Thursday (Nov 10) on fears US presidential nominee Donald Trump will enact protectionist policies that will hurt demand for Asian exports.

The Singdollar briefly touched 1.4 per US dollar at 8:48am, a level it last closed below back on March 2 this year. At 10:10am, the Singapore currency was trading at 1.3988, up 0.6 per cent from its close on Wednesday of 1.3905.

Bloomberg News reported that Malaysia's ringgit slumped to a nine-month low and the South Korean won extended losses as speculation Donald Trump will enforce protectionist US policies hurt demand for emerging-market currencies. The Republican contender had pledged to clamp down on immigration to the US and renegotiate free-trade agreements.

The US dollar also rebounded overnight as markets see a Republican-led Congress boosting spending, spurring inflation.

"There's still a lot of uncertainty in global trade policy coming from the new administration," said Stephen Innes, a senior trader at Oanda Asia Pacific Pte in Singapore told Bloomberg. "There'll be less vigour for investors to go into emerging-market currencies now given the more attractive yields in the US."

The ringgit weakened 0.5 per cent to 4.2467 per US dollar. It earlier reached 4.2580, the lowest since January and has lost 1.1 per cent in the past two days.

The won declined 0.5 per cent to 1,155.25 per dollar and reached a four-month low of 1,158.10. The currency plunged 1.3 per cent on Wednesday. Thailand's baht weakened 0.5 per cent to 35.112, headed for the biggest drop in a month.

China's yuan fell to fresh six-year lows against the US dollar. The onshore yuan opened trade at 6.7980 per dollar as the People's Bank of China set a weaker official midpoint for the fifth consecutive day at 6.7885, Reuters reported. Trump has slammed China over trade throughout his election campaign and pledged to slap 45 per cent tariffs on imported Chinese goods and label the country a currency manipulator in his first day in office.