* Asia FX mostly weaker, rupee and ringgit lead losses
* Muted reaction to news Yellen to be tapped for Fed chair
* U.S. debt ceiling worries cast cloud over risk sentiment
(Adds text, updates prices)
By Masayuki Kitano
SINGAPORE, Oct 9 (Reuters) - Asian currencies edged lower on
Wednesday, hampered by uncertainty over whether the White House
and U.S. lawmakers will agree to raise the country's debt
ceiling in time to avert the risk of a U.S. default.
While markets expect that a deal will be struck eventually,
nervousness is growing ahead of an Oct. 17 deadline identified
by U.S. Treasury Secretary Jack Lew for raising the country's
$16.7 trillion borrowing limit.
Emerging Asian currencies fell broadly, with losses led by
the Indian rupee and the Malaysian ringgit.
"The U.S. politicians are as further away from each other as
they've been in a while," said Jonathan Cavenagh, a
Singapore-based foreign exchange strategist for Westpac Banking
There seems to be a fair degree of nervousness in the
market, judging from moves such as a jump in the CBOE Volatility
Index and a spike in U.S. Treasury bill yields
, Cavenagh said.
Asian currencies showed limited reaction to news that
President Barack Obama will nominate Federal Reserve Vice Chair
Janet Yellen to be the next head of the U.S. central bank on
The decision to tap Yellen, who has been a forceful advocate
of the aggressive action taken under current chairman Ben
Bernanke to stimulate growth, came as little surprise to the
market, analysts said.
"I guess at this point, it wasn't that much of a surprise
any more that Obama nominated her," said a trader for a bank in
the Philippines, adding that while the dollar initially dipped
against Asian currencies on the news, the impact proved
At current levels, the ringgit had logged the second-biggest
percentage loss on the day among emerging Asian currencies
behind the Indian rupee.
The ringgit fell 0.3 percent, while the rupee was
down 0.5 percent.
The ringgit seems to be increasingly becoming a regional
barometer of investors' risk appetite, said Westpac's Cavenagh.
"It seems to me to be taking over the old job that
dollar/Korea used to have," Cavenagh said, adding that this may
be partly due to the fact that foreign ownership in Malaysia's
government bond market has been very high.
"So it's a pretty good proxy for some of these concerns that
people have for the region," he said.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0553 GMT
Currency Latest bid Previous day Pct Move
Japan yen 97.41 96.87 -0.55
Sing dlr 1.2512 1.2498 -0.11
Taiwan dlr 29.433 29.542 +0.37
Korean won 1074.25 1073.70 -0.05
Baht 31.40 31.35 -0.16
Peso 43.15 43.08 -0.16
Rupiah 11533.00 11525.00 -0.07
Rupee 62.10 61.79 -0.50
Ringgit 3.2050 3.1955 -0.30
Yuan 6.1192 6.1211 +0.03
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 97.41 86.79 -10.90
Sing dlr 1.2512 1.2219 -2.34
Taiwan dlr 29.433 29.136 -1.01
Korean won 1074.25 1070.60 -0.34
Baht 31.40 30.61 -2.52
Peso 43.15 41.05 -4.87
Rupiah 11533.00 9630.00 -16.50
Rupee 62.10 54.99 -11.45
Ringgit 3.2050 3.0580 -4.59
Yuan 6.1192 6.2303 +1.82
(Editing by Chris Gallagher)
- Budget, Tax & Economy