SINGAPORE, Oct. 24 (Reuters) — The Taiwan dollar fell to one-year low on Monday, as Asian currencies extended last week’s losses after a strong batch of US economic data bolstered expectations for further Fed rate rises.
Most Asian currencies pared losses in late trading, mimicking the Japanese yen’s modest rally from 2-year lows close to 116 per dollar.
The Taiwan dollar dropped as far as T$33.8 per US dollar and the Korean won fell to a 2005 low around 1,062 per US dollar before recovering to close local trade around 1,058.
Thailand’s markets were closed for a holiday.
Other Southeast Asian currencies such as the Singapore dollar and Philippine peso shed about a quarter of a percent each against the US currency in early dealing, before reclaiming some lost ground.
"The dollar has gained some momentum but much will depend on what happens to dollar/yen," Jan Lambregts, head of Asia-Pacific research at Rabobank, said.
He said that technically the yen’s decline to the weaker side of 115 a dollar raised the possibility of it falling further, even beyond 120.
But economic fundamentals, equity inflows into Japan and expectations for further gains in the Chinese yuan argued for longer-term yen strength, he said.
Lambregts said that would propel Asian currencies higher longer term, even though he expected only a modest half-a-percent rise in the yuan by the end of the year.
