January 29, 2013 / 8:18 AM / 5 years ago

EM ASIA FX-Won leads Asia FX gains after selloff; ringgit hit

* Won up 1 pct on exporters, offshore funds
    * Ringgit sees worst day in 8 mths on catch-up selling
    * Baht up on stock inflows, exporters
    * Corporate demand lifts Philippine peso

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, Jan 29 (Reuters) - The South Korean won had its
best day in 13 months, leading gains that most emerging Asian
currencies produced on Tuesday as investors saw their recent
weakness as excessive given the region's solid economic
fundamentals.
    The won ended the local trade up 1.0 percent
against the dollar, its largest daily percentage gain since Dec.
21, 2011, according to Thomson Reuters data.
    The Thai baht strengthened on stock inflows and
exporters' demand for settlements. The Philippine peso
 rose as corporate demand caused investors to cover
short positions.
    But the Malaysian ringgit suffered its largest
daily fall in more than eight months on catch-up selling after a
holiday on Monday. The central bank also told domestic banks to
use a reference rate produced by the country's foreign exchange
association for ringgit foreign exchange contracts.
 
    "Recent slides by emerging Asian currencies were seen as
overdone, even though they may see more downside in the short
term, given currency wars and possible short-covering in the
euro against Asian currencies," said Yuna Park, a currency and
bond analyst at Dongbu Securities in Seoul.
    "Asia FX will eventually rise in the longer term," Park
added.
    Most emerging Asian currencies strengthened at the start of
this year, but then weakened after investors booked profits from
their 2012 gains amid concerns that the units had risen too far
against a weakening yen.
    The won's surge on Tuesday came one day after it suffered
its largest daily fall in 16 months on selling from offshore
funds and stock outflows.
    
    WON
    The South Korean currency rebounded on exporters' demand for
month-end settlements and as offshore macro funds bought it
after the previous session's selloff.
    Earlier, its gains were limited by dollar demand linked to
foreign investors' recent stock sales with custodian banks'
dollar bids, dealers said.
    But sustained demand from exporters prompted stop-loss
dollar selling, they added.
    Skandinaviska Enskilda Banken (SEB) offered a trade idea to
buy the on dips, given South Korea's export recovery and
expected bond inflows. Market positions in the currency are not
crowded after recent slides, it added.
    However, SEB said the risk posed by buying on dips is that a
weaker yen could trigger more active intervention by South
Korea, especially if China's yuan fixing is not firm.
    "The central bank may become more active if the two biggest
neighbours, China and Japan, have weaker currencies," it said in
a note.
         
    BAHT
    The baht rose on exporters' demand and stock-related
inflows.
    The Thai currency accelerated its gain after strengthening
past 29.90 per dollar, dealers said.
    But its upside was capped by month-end dollar bids from
local importers.
          
    PHILIPPINE PESO
    The Philippine peso rebounded as corporate bids caused
investors to cover short positions in the local currency.
    A foreign bank dealer said the peso is expected to return to
an appreciation trend again, adding: "investors are not waiting
for 41.00 to sell dollar/peso anymore."
    
    RINGGIT
    The ringgit fell 1.1 percent to 3.0760 per dollar on demand
for the greenback from sovereign funds, custodian banks and
leveraged accounts. Investors also covered dollar-short
positions a day after a holiday on Monday.
    But some interbank speculators bought the ringgit on dips.
    If the Malaysian currency maintains the loss, it would be
its largest daily percentage fall since May 16, 2012, according
to Thomson Reuters data. Earlier, the ringgit touched 3.0810,
its weakest since Oct. 10.
    Currency market players did not show immediate reaction to
the central bank's move on fixing, although a trader said it
caused dollar-short covering.
    When financial markets in Malaysia were closed on Monday,
other emerging Asian currencies were hit by worries about
outflows.
    
    RUPIAH
    The rupiah's indicative prices slid 0.8 percent to 9,750 per
dollar, while it traded above 9,800 on month-end corporate
dollar demand, dealers said.
    The central bank was spotted providing dollar liquidity at
lower levels, such as 9,770, they added.
    Some dealers expected the rupiah to stabilise once
importers' dollar bids waned by the end of the month, given
strong determination by the central bank.
    Still, the rupiah is likely to stay softer as long as
investors remain worried about the size of the country's current
account deficit, dealers said.
    
  CURRENCIES VS U.S. DOLLAR
  Change on the day at 0812 GMT
  Currency    Latest bid   Previous day    Pct Move
  Japan yen        90.66          90.86       +0.22
  Sing dlr        1.2363         1.2383       +0.16
  Taiwan dlr      29.546         29.560       +0.05
  Korean won     1082.65        1093.50       +1.00
  Baht             29.83          29.98       +0.50
  Peso             40.72          40.91       +0.47
  Rupiah         9730.00        9670.00       -0.62
  Rupee            53.66          53.91       +0.47
  Ringgit         3.0760         3.0430       -1.07
  Yuan            6.2241         6.2226       -0.02
 
  Change so far in 2013
  Currency    Latest bid  End prev year    Pct Move
  Japan yen        90.66          86.79       -4.27
  Sing dlr        1.2363         1.2219       -1.16
  Taiwan dlr      29.546         29.136       -1.39
  Korean won     1082.65        1070.60       -1.11
  Baht             29.83          30.61       +2.61
  Peso             40.72          41.05       +0.81
  Rupiah         9730.00        9630.00       -1.03
  Rupee            53.66          54.99       +2.48
  Ringgit         3.0760         3.0580       -0.59
  Yuan            6.2241         6.2303       +0.10
 
 (Additional reporting by IFR Markets' Catherine Tan; Editing by
Richard Borsuk)

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