September 11, 2012 / 7:52 AM / 5 years ago

EM ASIA FX-Sing dlr leads gains; German ruling, Fed eyed

* Sing dlr hits 1-yr high, Taiwan dlr at over 3-mth peak
    * Taiwan intervention spotted - dealers
    * Exports data support Philippine peso
    * Rupiah dips on oil companies, but foreign banks buy it

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, Sept 11 (Reuters) - Most emerging Asian
currencies rose on Tuesday, tracking the euro's rise following a
German court decision that it will rule on euro zone's bailout
funds this week as scheduled, despite a legal challenge by a
    The Singapore dollar hit a one-year high with the
euro's rebound, and the Taiwan dollar was at its
strongest in more than three months on buying by foreign banks,
although the central bank was spotted slowing down its
    But analysts said the gains in emerging markets' currencies
-- which typically represent greater risk appetite -- were
limited because investors were waiting on the key German ruling
as well as a policy meeting of the U.S. Federal Reserve this
    "The euro is seen having entered in an overbought territory
and we have major events. So, it is difficult to chase Asian FX
here," said Jeong My-young, Samsung Futures' research head in
    "In addition, a slowing global economy, especially Chinese
market, kept weighing on sentiment. I don't see immediate boosts
from China's recent spending plans as it will take some time to
see their effects," Jeong added.
    Most emerging Asian currencies have risen since last week on
the European Central Bank's bond-buying plans and expectations
of a third round of easing by the Fed to shore up the world's
top economy.
    Germany's constitutional court ruling will decide on
Wednesday whether the country can legally participate in the
euro zone's permanent bailout fund, a vital decision as the ECB
can buy government bonds only in conjunction with the bailout
    The court said it would not postpone its long-awaited ruling
on the legality despite a new legal challenge by a ruling party
lawmaker. That helped the euro extend
    Few market players expect the court to rule the fund
unconstitutional, but some think the judges could attach tough
conditions on any future aid Germany may grant to other euro
zone countries. 
    The Singapore dollar strengthened to 1.2327 to the U.S.
dollar, its strongest since Sept. 13, 2011.
    But investors hesitated to chase the local currency further
on caution over possible intervention by the central bank.
    The Taiwan dollar touched 29.620 versus the greenback, its
strongest since May 29, in the island's main currency market on
demand from foreign banks amid expectations for the Fed's more
stimulus this week. Some exporters also bought the Taiwan dollar
for settlements.
    But the currency traded slightly weaker on the smaller
foreign exchange market than main market as dealers
said the central bank may have intervened. 
    The rare move bolstered caution over stronger intervention,
dealers said. The central bank usually steps in the main
currency market to keep the Taiwan dollar stable for exporters
and discourage speculation, according to dealers in Taipei.
    The intervention came as some traders had expected the
central bank to allow the Taiwan dollar to appreciate
temporarily before the Fed's meeting.
    The Philippine peso barely changed as strong exports data
offset caution over possible intervention by the central bank.
    The peso started the domestic trade at a session low of
41.670 per dollar as investors were wary of dollar purchases by
the authority.
    The local unit recovered most of initial losses after the
country's exports rose 7.8 percent in July from a year earlier,
higher than a 4.3 percent growth in June, although electronics
shipments dropped. 
    The central bank has not been spotted buying dollars yet,
dealers said.
    "I prefer to sell dollar on any rallies, given sound
fundamentals," said a European bank dealer in Manila.
    The rupiah eased on dollar demand from domestic oil
companies and local banks, dealers said.
    But the Indonesian currency found some relief as foreign
banks bought it before the finance ministry's bond auction later
in the day. The government aims to raise 5 trillion Indonesian
rupiah ($522.08 million).
    A Jakarta-based dealer said foreigners were looking for
Indonesian bonds on expectations of the Fed's quantitative
easing this week.
    "It is hard to say liquidity will improve or not with the
Fed's QE3, but it will definitely ease pressure on the rupiah,"
the dealer added.
  Change on the day at 0640 GMT
  Currency    Latest bid   Previous day    Pct Move
  Japan yen        78.21          78.28       +0.09
  Sing dlr        1.2327         1.2371       +0.36
  Taiwan dlr      29.683         29.740       +0.19
  Korean won     1127.94        1129.30       +0.12
  Baht             31.07          31.08       +0.03
  Peso             41.62          41.62       +0.00
  Rupiah         9580.00        9567.00       -0.14
  Rupee            55.51          55.44       -0.12
  Ringgit         3.0945         3.1010       +0.21
  Yuan            6.3356         6.3376       +0.03
  Change so far in 2012
  Currency    Latest bid  End prev year    Pct Move
  Japan yen        78.21          76.92       -1.65
  Sing dlr        1.2327         1.2969       +5.21
  Taiwan dlr      29.683         30.290       +2.04
  Korean won     1127.94        1151.80       +2.12
  Baht             31.07          31.55       +1.54
  Peso             41.62          43.84       +5.35
  Rupiah         9580.00        9060.00       -5.43
  Rupee            55.51          53.08       -4.37
  Ringgit         3.0945         3.1685       +2.39
  Yuan            6.3356         6.2940       -0.66
($1 = 9577.0000 Indonesian rupiahs)
(Additional reporting by Lin Miao-jung in TAIPEI and IFR
Markets' Catherine Tan; Editing by Sanjeev Miglani)
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