Asian units slide before Fed move on policy
After trading in dull ranges for two sessions, Asian currencies slipped yesterday as the United States Federal Reserve's anticipated move to raise interest rates drew nearer.
With recent consumer confidence and inflation data supporting the US dollar and boosting expectations of the first US rate rise in four years late yesterday, the Japanese yen slipped.
The South Korean won and Singapore dollar followed suit. The won dropped to 1,156 per US dollar - its weakest level in a week - and finished at 1,155.40 from 1,151.90 on Tuesday.
The Singapore dollar also extended its losses on the day to end at S$1.7195 per US dollar from $1.712 previously.
Traders said markets had priced in the widely expected quarter percentage point rise in US rates and the focus was on the Fed's statement for any changes in its intention to keep the tightening gradual.
Asian markets are worried any aggressiveness in the Fed's stance could cause more capital to leave the region, further hurting Asian stocks and bonds.
Elsewhere, politics continued to weigh on the Philippine peso and Indonesian rupiah.
In the Philippines, security forces were on alert while President Gloria Macapagal-Arroyo, who won the May presidential elections, took the oath of office. The peso began the day on a defensive note but ended the day at 56.11 per US dollar, slightly stronger than Tuesday's 56.20 finish.
The rupiah also rose very modestly towards the 9,400 per dollar level, shackled by concerns over the country's first direct presidential election, which takes place on July 5. The rupiah ended at 9,404 per dollar from 9,422.
The Taiwan dollar slipped in opening deals to NT$33.78 per US dollar and stayed weak most of the day, finishing the day's dealing at $33.775 from its $33.767 close on Tuesday.
The Thai baht eased to 40.95 per US dollar from 40.87.
The Australian dollar failed to reclaim the 69 US cents level yesterday despite strong domestic credit data, with the weight of support behind the greenback before the anticipated rate rise.
The aussie declined to 68.85 US cents from 69.93 previously.
The New Zealand dollar fell to 63.02 US cents from 63.9.