September 17, 2012 / 7:38 AM / 5 years ago

EM ASIA FX-QE3 pumps flows into Asia; India reforms power rupee

* Won at 6-1/2 mth high on stock inflows
    * Taiwan dlr up on foreign funds, exporters; caps
    * Rupiah hits near 7-wk high on bond inflows
    * Philippine peso ease; negative fwds prompt profit-taking

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, Sept 17 (Reuters) - Most emerging Asian
currencies extended gains on Monday, enjoying capital inflows to
the region after the Federal Reserve's aggressive policy
stimulus last week, and the Indian rupee hit a four-month high
on the government's reforms.
    The rupee has gained up to 1.2 percent to 53.66,
the strongest since May 15, as the Indian government on Friday
opened up the country's supermarket sector to foreign retailers 
and allowed more foreign investment in airlines and
broadcasters, a day after sharply increasing the price of
heavily-subsidized diesel. 
    The South Korean won hit a six-and-a-half month
high on stock inflows, and the Taiwan dollar touched
its peak in more than four months on incoming funds.
    The Indonesian rupiah also hit a near seven-week
high on bond inflows.
    "Asian currencies have room to rise further as the Fed did
not only pump up money but also let investors buy time," said
Jeong My-young, Samsung Futures' research head in Seoul.
    "Most risk currencies, especially the euro, looked
technically overbought. But Asian FX may not fall much even
though the euro may see corrections, as people will look for
chances to buy the currencies against the euro," she added.
    Before this emerging Asian units had weakened versus the
euro because the regional units did not reflect the rise in the
euro on worries that a slowing global economy would keep hurting
export-oriented Asia.
    Still, investors grew more cautious over possible
intervention by local authorities to stem their currency gains.
The central banks of Taiwan and Philippine were spotted buying
dollars, dealers said.
    Most regional units were also seen excessively bought,
suggesting they may suffer from short-term corrections.
    The 14-day relative strength indices (RSI) of U.S.
dollar/Singapore dollar, U.S. dollar/Taiwan dollar,
dollar/rupee and dollar/baht stayed below the threshold
30, indicating those pairs are in oversold territory.
    The RSI of dollar/won, dollar/peso and
dollar/rupiah stood above the threshold, but not far from that
    The Philippine peso and the Singapore dollar eased.
    The Taiwan dollar leaped to 29.198 against the U.S. dollar,
its strongest since May 3, on foreign funds inflows and as
domestic exporters chased it on expectations of further
    But the central ban was spotted buying U.S. dollars around
29.200 to slow down the local unit's strength, while importers
joined the bids, dealers said.
    The rupiah hit 9,443 to the dollar, the local unit's
strongest since Aug. 1 on bond inflows, dealers said.
    The Indonesian currency found a resistance at that level as
local banks bought dollars on behalf of their local corporates.
    Still, the rupiah is expected to rise further on more
inflows with the Fed's stimulus, dealers said.
    "The QE3 will boost inflows and investor confidence in
foreign direct investments here," said a Jakarta-based dealer,
adding the rupiah may head to 9,400.
    "The policy would be beneficial for Indonesia as it would
strengthen the rupiah without BI having to dig deep into its
foreign exchange reserves," said the dealer, referring to Bank
    The central bank had been seen intervening to stem weakness
in the rupiah, according to dealers.
    The won advanced to 1,113.3 per greenback, its strongest
since March 2, on demand linked to foreign investors' stock
    Foreigners bought a net 503.1 billion won ($450.38 million)
worth of Seoul shares after absorbing a net 1.28
trillion won on Friday, according to the Korea Exchange data.
    Caution grew over possible intervention by the foreign
exchange authorities to stem the won's strength, and domestic
importers bought dollars for payments.
    "The authorities may allow more gains if the euro and stocks
stay firm, while the speed of appreciation is slow," said a
senior foreign bank dealer in Seoul.
    "But they will step in 1,110," he said.
    The Philippine peso weakened as traders reduced bullish
positions with short-term forwards negative and as the
central bank was spotted intervening by buying dollars, dealers
    The peso started local trade firm at a session peak of 41.33
per dollar, but turned lower. The central bank was seen around
41.35, dealers said.
    "Onshore swap points collapsed and were quoted at negative
points. Negative points have a negative carry on long peso
positions and make it expensive to hold on to dollar short
positions overnight," a foreign bank dealer in Manila.
    Most of the short-term peso forwards from overnight to
two-month were quoted at a discount, indicating that it was
costlier to hold a short dollar position.
    The Singapore dollar eased on local bank offers around
1.2200 to U.S. dollar with disappointing export data cementing
caution over the central bank's intervention.
    Singapore's non-oil exports in August fell more than
expected, raising the prospects of the city-state entering into
a recession. 
  Change on the day at 0655 GMT
  Currency    Latest bid   Previous day    Pct Move
  Japan yen        78.27          78.38       +0.14
  Sing dlr        1.2237         1.2200       -0.30
  Taiwan dlr      29.276         29.469       +0.66
  Korean won     1115.77        1117.20       +0.13
  Baht             30.80          30.74       -0.19
  Peso             41.56          41.42       -0.34
  Rupiah         9455.00        9500.00       +0.48
  Rupee            54.09          54.30       +0.39
 *Ringgit         3.0350         3.0420       +0.23
  Yuan            6.3156         6.3145       -0.02
  Change so far in 2012
  Currency    Latest bid  End prev year    Pct Move
  Japan yen        78.27          76.92       -1.73
  Sing dlr        1.2237         1.2969       +5.98
  Taiwan dlr      29.276         30.290       +3.46
  Korean won     1115.77        1151.80       +3.23
  Baht             30.80          31.55       +2.44
  Peso             41.56          43.84       +5.49
  Rupiah         9455.00        9060.00       -4.18
  Rupee            54.09          53.08       -1.87
  Ringgit         3.0350         3.1685       +4.40
  Yuan            6.3156         6.2940       -0.34
 * Financial markets in Malaysia were closed for a holiday.

($1 = 1117.0500 Korean won)  
(Additional reporting by Emily Chan in TAIPEI; Editing by Eric
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