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EM ASIA FX-Asia FX dips on importers, high US bond yields
March 20, 2012 / 8:23 AM / 6 years ago

EM ASIA FX-Asia FX dips on importers, high US bond yields

* Sing dlr down on hedge funds, specs; model account relieve
    * Won dips on importers, custodian names; dividend flows
    * Philippine peso turns weaker on dollar short-covering

 (Adds details, updates prices)	
    By Jongwoo Cheon	
    SINGAPORE, March 20 (Reuters) - Most emerging Asian
currencies slid on Tuesday as short-term investors cut positions
on higher U.S. Treasury yields and importers bought dollars on
firm oil prices.	
    The regional units started the day slightly higher, but
tracked a softer Australian dollar which weakened after BHP
Billiton said it expects China's iron ore demand growth to fall
to single digits. 	
    Asian stocks also fell, putting pressure on emerging Asian
    "It is difficult to buy Asian currencies as the dollar is
seen staying firm with higher U.S. Treasury yields and it is a
matter of time for the euro to fall again," said a senior dealer
at a Malaysian bank in Kuala Lumpur.	
    "But I still believe Asian currencies will regain strength
in the next few months and I am sitting out this period," the
dealer added.	
    Longer-dated U.S. bond yields on Monday touched a near
five-month high. Investors are likely to keep cutting bond
holdings on signs of a recovery in the U.S. economy, which will
support the dollar.	
    The strength in the dollar, along with China's move to widen
the yuan's trading band, has capped appreciation in emerging
Asian currencies.	
    But China's central bank on Tuesday fixed the yuan's
mid-point at a stronger level against the dollar for a third
consecutive session, undercutting views that Beijing may want to
have a weaker yuan to boost growth.	
    In the belief the yuan would weaken, "some offshore players
built up long dollar/Asia positions too much last week," said a
foreign bank dealer in Seoul. "Ironically, Asian currencies
could resist pressure from a firm dollar as those players need
to clear the positions." 	
    So, the regional currencies are expected to stay in the
recent ranges for the time being, the dealer added.	
    Investors are keeping an eye on speeches of Federal Reserve
Chairman Ben Bernanke later this week, but few expect him to
provide fresh factors that would break the trading ranges of
emerging Asian currencies.	
    Hedge funds and interbank speculators lifted U.S.
dollar/Singapore dollar on a weaker Australian dollar,
dealers said.	
    But gains were capped by selling interest from model
accounts, they added.	
    The pair has a resistance near 1.2617 where the bottom of
the daily Ichimoku cloud sits.	
    Dollar/won initially fell on South Korean
exporters, but the pair turned higher on bids from importers and
custodian banks.	
    Expected dollar demand linked to local companies' dividend
payments to foreign shareholders also supported the pair. Many
South Korean companies pay dividends in March and April.	
    A tobacco maker KT&G is scheduled to pay
dividends on Friday with foreigners estimated to receive 264.1
billion won ($235.34 million), according to Reuters'
    POSCO is set to pay dividends on March 27 and
foreigners are estimated to take 316.5 billion won in dividends,
the calculations showed.	
    Those dividend payments may support dollar/won, but they
will not lift the pair as foreigners are unlikely to take all
the proceeds back home, dealers said.	
    Meanwhile, yen/won rebounded to 13.4717 but the
cross is seen eventually testing the 76.4 percent Fibonacci
retracement near 13.39 of its rises April-October last year.	
    Its 200-week moving average around 13.31 is not far, either,
and it is on the course for the biggest quarterly drop since the
first quarter of 1998.	
    Real money investors have sold the cross pair recently, a
foreign bank dealer in Seoul said.	
    Dollar/rupiah rose 0.5 percent to 9,170 per dollar.	
    Lack of interest from interbank speculators and persistent
intervention from the central bank kept dealers away from this
pair but strong demand from locals could still push the pair up
towards the 9200 handle again.	
    Continued rise in oil prices and higher dollar/Asian
currencies fueled bidding in the offshore non-deliverable
forwards (NDFs), with the one-month swap point widening.	
    Dollar/Philippine peso turned higher as bids from
foreign names prompted interbank speculators to cover short
    The pair finds support at 42.80, near the bottom of daily
Ichimoku cloud, dealers said.	
  Change on the day at 0725 GMT	
  Currency    Latest bid   Previous day    Pct Move
  Japan yen        83.41          83.35       -0.07
  Sing dlr        1.2593         1.2554       -0.31
  Taiwan dlr      29.518         29.532       +0.05
  Korean won     1124.85        1122.30       -0.23
  Baht             30.70          30.72       +0.07
  Peso             42.93          42.89       -0.09
  Rupiah         9170.00        9120.00       -0.55
  Rupee            50.24          50.23       -0.02
  Ringgit         3.0651         3.0545       -0.35
  Yuan            6.3224         6.3233       +0.01
  Change so far in 2012
  Currency    Latest bid  End prev year    Pct Move
  Japan yen        83.41          76.92       -7.78
  Sing dlr        1.2593         1.2969       +2.99
  Taiwan dlr      29.518         30.290       +2.62
  Korean won     1124.85        1151.80       +2.40
  Baht             30.70          31.55       +2.77
  Peso             42.93          43.84       +2.12
  Rupiah         9170.00        9060.00       -1.20
  Rupee            50.24          53.08       +5.65
  Ringgit         3.0651         3.1685       +3.37
  Yuan            6.3224         6.2940       -0.45
 ($1 = 1122.2000 Korean won)	
(Additional reporting by Lee Kyoung-ho, Ye-na Park in SEOUL and
IFR Markets' Catherine Tan; Editing by Ramya Venugopal)	
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