Asian falls spark investor fear

A drop in the strength of the Indonesian rupiah and South Korean won have sparked fears among investors of growing contagion in Asian markets.

The Financial Times reports the won has fallen by 1.1 per cent against the dollar, while the rupiah was down by 2.5 per cent earlier today (September 14th).

Indonesia, Malaysia and Korea were highlighted as the three most affected countries by ongoing uncertainty in the eurozone and this has led to a shaky afternoon's trading.

"All three had quite heavy bond positions. People are trying to reduce their positions because they don't know how Europe will develop in the coming days," commented Perry Kojodjojo, Asian currency strategist at HSBC.

Kit Juckes, head of FX strategy at Societe Generale, also told the publication that falls could be early signs of Asian markets catching the "European flu".

The news comes following the publication of a statement by German chancellor Angela Merkel, that member states are committed to doing all they can to stabilise the euro and to ensure Greece does not default on its borrowings.

Posted by Andrew Cottrill