Asian currencies fall on Middle East jitters

Business Recorder

6 hours ago

BENGALURU: Most Asian currencies slipped on Wednesday as tensions between Israel and Iran remained in focus, while Indonesia's rupiah and stocks were little-changed after the central bank held rates steady, as expected.
Bank Indonesia governor Perry Warjiyo said at a press conference that the central bank would continue to monitor for room to further support growth, while maintaining inflation within target and keeping the rupiah stable.
The rupiah, which has appreciated 4% from the all-time low on April 9, was last marginally down 0.1% at 16,290 per dollar. Stocks fell 0.7%.
'Steady US rates and geopolitical risks might provide a brief respite to the greenback, limiting the room for further rupiah appreciation. After a temporary pause in June, we expect BI to stay on an easing path, with the door open for another 50bp cuts this year,' said Radhika Rao, senior economist at DBS.
Other regional currencies were broadly weaker as the conflict between Iran and Israel entered a sixth day, with US President Donald Trump calling for Iran's unconditional surrender and warning US patience was wearing thin.
The Israeli shekel was last marginally up at 3.5020 per dollar. It fell 0.4% on Tuesday.
The MSCI index of emerging market currencies edged down 0.2%. The Malaysian ringgit and the Indian rupee inched 0.1% lower each against a wobbly dollar. The Philippine peso fell 1.2% to its lowest level in two months.
The peso has performed well for most of this year, which is making it vulnerable as negative factors, including higher oil prices and concerns of a rate cut by the central bank, start weighing in, said Alan Lau, FX strategist at Maybank.