SINGAPORE: The South Korean won and Malaysian ringgit led Asian currencies higher on Monday as
investors bid up riskier assets, prompting several central banks in the region to intervene to temper local currency gains.
Asian stocks rose on strong corporate earnings and shrugged off news that Chinese manufacturing shrank in July amid investor hopes that the world's fastest growing major economy will continue to expand strongly.
Chinese manufacturing shrank in July for the first time since the global downturn in March 2009 as government moves to rein in credit growth and fight property speculation, but analysts played down the risk of a serious slowdown.
The U.S. dollar hit a three-month low against a basket of currencies, hurt by persistent worries that the U.S. economic recovery is losing steam.
The South Korean won gained 1 percent to a six-week high of 1,171.3 per dollar, but failed to break chart resistance at 1,170 as authorities were spotted intervening to curb won strength.
Exporters and offshore players bought the won as dollar was broadly weak.
"Market players are expecting the won's further rise but the authorities hold the key," says a foreign bank dealer.
Seoul shares <.KS11> rise 1.21 percent as foreign investors buy a net 68.4 billion won worth of stocks on the main exchange.
RINGGIT
The Malaysian ringgit gained as much as 0.8 percent to 3.1570 per dollar, its highest since May 2008, on broad dollar weakness and as investors bought risky assets after China's official Purchasing Managers' Index for July was not as weak as feared.
"The ringgit gained in response to lower dollar/Asian in general," said a trader in Kuala Lumpur.
Investors expected further ringgit gains as the dollar faltered against the euro and other major currencies.
"I think we may be at the begining of a move lower in dollar/Asia," said a second trader.
Meanwhile, one-month dollar/ringgit NDFs fell to 3.1535 from 3.1895 late on Friday.
RUPIAH
The Indonesian rupiah pulled back to 8,952 per dollar from an intraday high of 8,940 after data showed Indonesia's July inflation accelerated to its highest level since April 2009, fuelling market expectations the central bank may raise interest rates later this year.
"Bad inflation could push bond and equity investors to get out of Indonesia," said a Jakarta-based trader.
Earlier, traders spotted dollar-buying intervention by state banks to cap the rupiah as it tries to break 8,940.
Investors have flocked to Indonesia's stock and bond markets to cash in on the country's solid economic growth and expectations of further currency gains.
PESO
The Philippine peso gained half a percent to 45.335 per dollar, a six-week high, as Asian currencies rode on sustained positive sentiment for emerging market assets.
"The peso's strength reflects a weak dollar and good prospects on the local economic front," a Manila-based trader said.
Philippine Finance Secretary Cesar Purisima said on Monday the government "will be opportunistic" on its planned global peso bond issue, and hoped to issue the bonds this year.
Dollar/peso NDFs fell across the curve, with the most liquid one-month NDFs falling to a near-six-week low of 45.44 from 45.55 late on Friday.
BAHT
The Thai baht gained half of a percent to 32.08 per dollar, with some traders detecting sporadic moves by the Bank of Thailand (BOT) to slow baht gains.
"Asian currencies are benefiting from market relief that China's slower output growth reflects government tightening measures rather than a domestic demand fall. Sentiment on emerging Asia is quite upbeat," a Bangkok-based trader said.
Another dealer said BOT was suspected of bidding for dollars at 32.20 in the morning.
"It's an attempt to slow baht gains. If it slips below 32.20, it could slide further to 32.15 this week," said the dealer. - Reuters
investors bid up riskier assets, prompting several central banks in the region to intervene to temper local currency gains.
Asian stocks rose on strong corporate earnings and shrugged off news that Chinese manufacturing shrank in July amid investor hopes that the world's fastest growing major economy will continue to expand strongly.
Chinese manufacturing shrank in July for the first time since the global downturn in March 2009 as government moves to rein in credit growth and fight property speculation, but analysts played down the risk of a serious slowdown.
The U.S. dollar hit a three-month low against a basket of currencies, hurt by persistent worries that the U.S. economic recovery is losing steam.
The South Korean won
Exporters and offshore players bought the won as dollar was broadly weak.
"Market players are expecting the won's further rise but the authorities hold the key," says a foreign bank dealer.
Seoul shares <.KS11> rise 1.21 percent as foreign investors buy a net 68.4 billion won worth of stocks on the main exchange.
RINGGIT
The Malaysian ringgit
"The ringgit gained in response to lower dollar/Asian in general," said a trader in Kuala Lumpur.
Investors expected further ringgit gains as the dollar faltered against the euro
"I think we may be at the begining of a move lower in dollar/Asia," said a second trader.
Meanwhile, one-month dollar/ringgit NDFs
RUPIAH
The Indonesian rupiah
"Bad inflation could push bond and equity investors to get out of Indonesia," said a Jakarta-based trader.
Earlier, traders spotted dollar-buying intervention by state banks to cap the rupiah as it tries to break 8,940.
Investors have flocked to Indonesia's stock and bond markets to cash in on the country's solid economic growth and expectations of further currency gains.
PESO
The Philippine peso
"The peso's strength reflects a weak dollar and good prospects on the local economic front," a Manila-based trader said.
Philippine Finance Secretary Cesar Purisima said on Monday the government "will be opportunistic" on its planned global peso bond issue, and hoped to issue the bonds this year.
Dollar/peso NDFs fell across the curve, with the most liquid one-month NDFs
BAHT
The Thai baht
"Asian currencies are benefiting from market relief that China's slower output growth reflects government tightening measures rather than a domestic demand fall. Sentiment on emerging Asia is quite upbeat," a Bangkok-based trader said.
Another dealer said BOT was suspected of bidding for dollars at 32.20 in the morning.
"It's an attempt to slow baht gains. If it slips below 32.20, it could slide further to 32.15 this week," said the dealer. - Reuters
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