SINGAPORE: The Malaysian ringgit hit a 13-year high on Monday, Aug 23 as foreign investors snapped up local bonds, while the Thai baht rose to its highest in 28 months after data showed faster-than-expected economic growth.
Most Asian currencies marked time as the dollar held steady after a jump late last week.
RINGGIT
The Malaysian ringgit gained half of a percent 3.1250 per dollar, a 13-year high, as investors bought local bonds.
"Some risk aversion is spilling into Asia, but it's not affecting ringgit. The feel-good factor from last week's FX liberalisation measures underpins ringgit," said a trader in Kuala Lumpur.
A second trader says ringgit is driven by offshore funds flowing into local bond markets.
Yields on five-year government bonds fell to 3.252 percent, the lowest in six months.
Traders expect the ringgit to test 3.10, a level last hit in mid-October 1997, in coming weeks.
The ringgit, the top performer in Asia, has rallied 9.5 percent against the dollar so far this year.
Meanwhile, one-month dollar/ringgit non-deliverable forwards dropped to 3.1265 from 3.1390 late on Friday.
BAHT
The Thai baht gained 0.4 percent to 31.36 per dollar, the highest since April 2008, after data showed the economy unexpectedly grew in the second quarter from the first as a surge in exports offset deadly political unrest, cementing expectations interest rates will rise further this year.
"It is the sustained bullish momentum for the baht. Everything is looking good for Thailand at this time. The outlook for Asian currencies may be a bit hazy after a bullish run in recent weeks, but for dollar/baht it is quite clear where it is heading," said a Bangkok-based trader.
"The Bank of Thailand is taking a rather defensive posture on how to intervene to slow baht gains. Its dollar bids have been spotty, going in only from time to time," the trader added.
The baht has gained 6 percent this year, the third-best Asian performer after the ringgit and yen.
YUAN
Dollar/yuan NDFs rose after the central bank set a weaker mid-point on the back of a rebounding dollar.
But traders saw selling interest emerge on optimism over growth in Asia and China amid renewed worries about the United States, putting a ceiling on NDFs.
"A broad range of asset managers from abroad are now selling dollar/yuan NDFs," said an NDF trader at a European bank in Hong Kong. "The theme is Asia will outperform the U.S. and Europe."
The spot yuan fell to 6.7980 per dollar from Friday's 6.7902, as the PBOC showed initiative to keep the yuan in a small range as China's economic recovery was not on solid footing.
One-year NDFs edged up to 6.6799 from late Friday's 6.6775, with implied appreciation actually rising to 1.78 percent from 1.66 percent.
WON
The South Korean won edged up to 1,182 per dollar from the previous domestic close of 1,183.0.
Earlier, the won strengthened as far as 1,177.9.
"Firmer stocks support the won. But many like to build up dollar-long positions and the market seems a bit heavy with the positions," said a foreign bank dealer. - Reuters
Most Asian currencies marked time as the dollar held steady after a jump late last week.
RINGGIT
The Malaysian ringgit gained half of a percent 3.1250 per dollar, a 13-year high, as investors bought local bonds.
"Some risk aversion is spilling into Asia, but it's not affecting ringgit. The feel-good factor from last week's FX liberalisation measures underpins ringgit," said a trader in Kuala Lumpur.
A second trader says ringgit is driven by offshore funds flowing into local bond markets.
Yields on five-year government bonds fell to 3.252 percent, the lowest in six months.
Traders expect the ringgit to test 3.10, a level last hit in mid-October 1997, in coming weeks.
The ringgit, the top performer in Asia, has rallied 9.5 percent against the dollar so far this year.
Meanwhile, one-month dollar/ringgit non-deliverable forwards dropped to 3.1265 from 3.1390 late on Friday.
BAHT
The Thai baht gained 0.4 percent to 31.36 per dollar, the highest since April 2008, after data showed the economy unexpectedly grew in the second quarter from the first as a surge in exports offset deadly political unrest, cementing expectations interest rates will rise further this year.
"It is the sustained bullish momentum for the baht. Everything is looking good for Thailand at this time. The outlook for Asian currencies may be a bit hazy after a bullish run in recent weeks, but for dollar/baht it is quite clear where it is heading," said a Bangkok-based trader.
"The Bank of Thailand is taking a rather defensive posture on how to intervene to slow baht gains. Its dollar bids have been spotty, going in only from time to time," the trader added.
The baht has gained 6 percent this year, the third-best Asian performer after the ringgit and yen.
YUAN
Dollar/yuan NDFs rose after the central bank set a weaker mid-point on the back of a rebounding dollar.
But traders saw selling interest emerge on optimism over growth in Asia and China amid renewed worries about the United States, putting a ceiling on NDFs.
"A broad range of asset managers from abroad are now selling dollar/yuan NDFs," said an NDF trader at a European bank in Hong Kong. "The theme is Asia will outperform the U.S. and Europe."
The spot yuan fell to 6.7980 per dollar from Friday's 6.7902, as the PBOC showed initiative to keep the yuan in a small range as China's economic recovery was not on solid footing.
One-year NDFs edged up to 6.6799 from late Friday's 6.6775, with implied appreciation actually rising to 1.78 percent from 1.66 percent.
WON
The South Korean won edged up to 1,182 per dollar from the previous domestic close of 1,183.0.
Earlier, the won strengthened as far as 1,177.9.
"Firmer stocks support the won. But many like to build up dollar-long positions and the market seems a bit heavy with the positions," said a foreign bank dealer. - Reuters
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