Oil drags on Asian currencies
ASIAN currencies slumped yesterday as an overnight sell-off in oil hit sentiment, while the Australian dollar dropped after the central bank slashed interest rates to a record low 1.5 percent.
Lingering worries about a supply glut drove crude to below US$40 a barrel in New York, a three-month low, dragging down oil-linked currencies like the Malaysian ringgit.
The Aussie dropped after the central bank cut its cash rate, a widely expected move to help the economy as it transitions away from a decade-long mining boom.
In Japan, the yen dipped against the dollar as investors waited for the government to spell out details of its 28-trillion yen (US$273 billion) plan to boost sluggish growth.
The ringgit weakened 0.5pc against the dollar, while other emerging market units, including the South Korean won, Indonesia’s rupiah and the Philippine peso, were also down against the greenback.
The Aussie fell as low as 74.91 US cents, from around 75.40 cents just before the rate decision.
In Tokyo, the dollar bought 102.33 yen, down from 102.41 on August 1 in New York. The euro was at $1.1179 and 114.40 yen, against $1.1160 and 114.29 yen.
Japan’s finance minister pointed to “extremely nervous movements” in forex rates during a regular press briefing yesterday, as officials fret over a sharp appreciation in the yen. –