Asian currencies retreat after hot US inflation, South Korean stocks slip 8%

Business Recorder reported that most emerging Asian currencies lost ground on Thursday, as US consumer prices climbed more than forecast and raised the prospect of more Federal Reserve rate increases. The won shed more than one per cent, touching a two-week trough at 1,352.84 per dollar. The Taiwan dollar slumped to 32.325, its weakest level since early August.

Heavy losses in chip shares across South Korea and Taiwan weighed on their currencies. The KOSPI fell more than 8%, and a circuit breaker was activated, the first such step in 2-1/2 months. Samsung Electronics and SK Hynix, two leading memory chipmakers, lost close to 10% and 12% respectively, while Taiwan's market dropped 3.8% and TSMC slid almost 3%, its weakest since late September.

The Philippine peso fell to an all-time low of 63.09 per dollar, weighed down by costly oil, El Niño threats to food costs, elevated inflation, sluggish growth and a worsening current account. Goldman Sachs analysts expect further peso weakness and two more quarter-point rate hikes from the Bangko Sentral ng Pilipinas, with the first possibly next week. Elsewhere, the rupiah slipped to 17,955 a dollar, while the Indian rupee edged up to 94.885 at the open, with traders telling Reuters the central bank will likely keep selling dollars through state-run banks.