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EM ASIA FX-Won leads Asia FX higher as U.S. jobs data spurs short-covering
August 5, 2013 / 4:57 AM / in 4 years

EM ASIA FX-Won leads Asia FX higher as U.S. jobs data spurs short-covering

* Won rises on shipbuilders, stop-loss dlr selling
    * Taiwan dollar gains on short-covering; importers limit
    * Ringgit, baht up on lower yields, position adjustments

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, Aug 5 (Reuters) - The South Korean won rose on
Monday as weaker-than-expected U.S. July jobs data prompted
investors to cut bearish bets on emerging Asian currencies.
    The won outperformed regional peers on demand
from exporters. The Taiwan dollar gained on
short-covering while the Malaysian ringgit and the Thai
baht advanced as bond yields in those countries fell. 
    U.S. employers slowed their pace of hiring in July to lower
than expected although the jobless rate fell, a pair of mixed
signals that could make the Federal Reserve more cautious over
scaling back its bond-buying programme. 
    A Reuters poll on Friday found that fewer U.S. primary
dealers expect the Fed to begin reducing economic stimulus in
September than they did a month ago, with dealers now split over
whether the central bank will cut back on buying in September or
in the following few months. 
    "Asian FX should draw strength from the fact that investors
are now likely to be less fearful of an outflow of capital to
the U.S.," said Dariusz Kowalczyk, senior economist and
strategist for Credit Agricole CIB in Hong Kong.
    Last week, most emerging Asian currencies slid as investors 
expected strong U.S. jobs data.  U.S. employers excluding the
farming sector added 162,000 jobs last month, the smallest gain
in four months and below analysts' expectations of 184,000.
    Still, some analysts said the data may not support emerging
Asian currencies much as investors stay cautious about the Fed.
    "We feel that the (jobs) data was not 'bad' enough to push
the Fed off of what would have been its previous trajectory, and
thus the fairly restrained reaction in USD/Asia seems
reasonable," Sacha Tihanyi, a senior currency strategist for
Scotiabank, said in a note to clients.
    "We do still subscribe to the notion that the taper will
take place this year."
    
    WON
    The won rose on demand from local exporters including
shipbuilders, and on stop-loss dollar selling.
    The South Korean currency's upside was limited by a slight
rebound in the dollar index.
    Investors stayed cautious over possible intervention by 
foreign exchange authorities to stem further appreciation,
especially when the won is stronger than 1,120 per dollar,
traders said.
    The country's foreign reserves jumped to a record high in
July, central bank data showed earlier. 
    "It is better to buy dollar/won on dips, tracking broad
strength in the dollar," said a senior foreign bank trader in
Seoul.
    
    TAIWAN DOLLAR
    The Taiwan dollar rose in thin trading after the U.S. jobs
data.
    The island's currency failed to extend gains as domestic
importers purchased the U.S. dollar below 29.960, traders said.
    Exporters did not chase the Taiwan dollar after their recent
purchases and as the currency is not weak enough to spur fresh
demand, traders added.
    Investors also stayed cautious over possible intervention by
the central bank to stem the currency's appreciation.
    
    RINGGIT
    The ringgit gained on short-covering with three-, five- and
ten-year bonds yields   lower.
    Still, investors hesitated to add more bullish bets as June
exports fell more than expected to a four-month low.
 
    "It is possible to see the ringgit as firm as 3.21 on
position adjustments," said a senior Malaysian bank trader in
Kuala Lumpur, referring to the currency's value against the
dollar.
    "But the dollar is still on uptrend," he added.
    
    BAHT
    The baht advanced on short-covering and as five-year bond
yields fell 8 basis points (bps) to 3.69 percent.
Ten-year bond yields also slid 6 bps to 3.97
percent.
    Some investors, however, preferred to maintain bearish bets
on the Thai currency, traders said.
    "I don't think people cut long dollar positions yet. They
are still patient," said a Thai bank trader in Bangkok.
    The trader said the baht's rebound is not big enough to
cause more investors to cover short positions in the currency.
    
  CURRENCIES VS U.S. DOLLAR
  Change on the day at 0452 GMT
  Currency    Latest bid   Previous day    Pct Move
  Japan yen        98.77          98.95       +0.18
  Sing dlr        1.2706         1.2724       +0.14
  Taiwan dlr      29.940         30.129       +0.63
  Korean won     1114.70        1123.60       +0.80
  Baht             31.32          31.41       +0.27
  Peso             43.49          43.61       +0.26
 *Rupiah        10280.00       10280.00       +0.00
  Rupee            60.89          61.10       +0.34
  Ringgit         3.2415         3.2575       +0.49
  Yuan            6.1272         6.1294       +0.04
 
  Change so far in 2013
  Currency    Latest bid  End prev year    Pct Move
  Japan yen        98.77          86.79      -12.13
  Sing dlr        1.2706         1.2219       -3.83
  Taiwan dlr      29.940         29.136       -2.69
  Korean won     1114.70        1070.60       -3.96
  Baht             31.32          30.61       -2.27
  Peso             43.49          41.05       -5.61
  Rupiah        10280.00        9630.00       -6.32
  Rupee            60.89          54.99       -9.69
  Ringgit         3.2415         3.0580       -5.66
  Yuan            6.1272         6.2303       +1.68
 * Financial markets in Indonesia are closed this week for
holidays.

 (Additional reporting by Emily Chan in TAIPEI; Editing by
Richard Borsuk)

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