Short-covering supports Asia FX; ringgit up after solid growth: Reuters Most emerging Asian currencies rose on Monday as investors reduced bearish bets on regional units, with the dollar softer amid uncertainty over how long the U.S. Federal Reserve will keep up its policy stimulus. The Malaysian ringgit gained as the economy picked up pace in the third quarter on resilient domestic demand and a recovery in exports. The South Korean won advanced on exporters demand, hitting its strongest rate against the yen in more than five years. The Thai baht rose, although slower-than-expected third quarter growth limited its upside. The dollar weakened slightly versus a basket of six major currencies. The greenback has stayed under pressure since Fed Chair nominee Janet Yellen last week supported the current bond-buying programme. Yellens dovish remarks, however, failed to support most emerging Asian currencies last week. Todays Asia FX gains are just on short-covering, said Yuna Park, a currency and bond analyst at Dongbu Securities in Seoul. Despite Yellen, strong U.S. data will keep fuelling tapering risks. So, it is hard to see fund inflows to emerging Asia, Park added. This weeks focus will be a string of speeches from Fed officials including Chairman Ben Bernanke, scheduled to speak on Communication and Monetary Policy on Tuesday. Investors were also awaiting minutes of the Feds Oct. 29-30 meeting, due on Wednesday. RINGGIT The ringgit rose after central bank data on Friday showed Malaysias economy grew 5.0 percent in the third quarter, beating market expectations, and its current account surplus widened significantly. The Malaysian currency pared some of earlier gains on local dollar demand. A senior Malaysian bank trader in Kuala Lumpur said he would buy the ringgit for day trading only and would not carry long positions. RUPIAH The rupiah eased on month-end corporate dollar demand. The Jakarta Interbank Spot Dollar Rate (JISDOR) was fixed at 11,627, compared with the previous 11,561. The Indonesian unit recovered some of losses as local shares jumped 1.4 percent, outpacing regional peers. Bond yields also fell in thin trade. The worst-performing Asian currency of the year may receive more support from inflows of bond seeking higher yields, traders said. Still, the rupiah is likely to depreciate more on corporate dollar demand, they added. I need to buy dollars for importers, said a Jakarta-based trader, adding he is bearish on the rupiah. WON The won rose on exporters demand for month-end settlements, while caution over possible intervention by the foreign exchange authorities limited its upside. Caution grew as the won advanced to 10.5688 to the yen, its strongest since September 2008. South Korea competes against Japan in key exports markets. Traders, however, hesitated to sell the won on expectations of increasing exporters bids before the month-end. On Friday, exporters triggered short squeezes, helping the won report a weekly gain. The best trade strategy is a play for a range between 1,060 and 1,070 now, said a senior foreign bank trader in Seoul, referring to the wons value against the dollar.
Posted on: Mon, 18 Nov 2013 05:46:06 +0000
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