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EM ASIA FX-Won leads slide on China data, c.bank caution; reform woes hit rupee
September 20, 2012 / 8:12 AM / 5 years ago

EM ASIA FX-Won leads slide on China data, c.bank caution; reform woes hit rupee

* Dollar-short covering hits won, ringgit, baht
    * Rupee at near 1-week low on reform worries
    * Won may head to 1,125.7/dlr; ringgit to 3.0835/dlr

 (Adds text, updates prices)
    By Jongwoo Cheon
    SINGAPORE, Sept 20 (Reuters) - Most emerging Asian
currencies fell on Thursday, as support from the Bank of Japan's
policy stimulus waned while caution grew over possible
intervention to stem strength in some currencies.
    Data showing little respite for Chinese manufacturers in the
world's second-largest economy, also dampened sentiment.
    The South Korean won led the slide among regional
units as traders scrambled to reduce bullish bets on the unit.
    The Indian rupee fell to its lowest in nearly a
week as a key ally of the country's ruling coalition withdrew
its support, raising worries the government may roll back key
reforms such as the increase in diesel prices.
    The Malaysian ringgit and the Thai baht 
also shed on dollar-short covering.
    The depreciation came amid growing tensions between China
and Japan over a disputed island chain and as other risky assets
such as Asian shares extended losses after lackluster Chinese
manufacturing data.
    A private sector survey on manufacturing activity in the
country showed a contraction for the 11th month in a row in
September, signaling the economy remains on track for a seventh
quarter of slowing growth. 
    French business activity took a sharp turn for the worse in
September, shrinking at its fastest rate since April 2009, a
separate poll showed. 
    Maybank FX research head Saktiandi Supaat in Singapore said
a sluggish global economy is likely to prevent investors from
continuing to absorb Asian assets.
    "The question is whether real money funds are willing to
pour in more into this region," said Supaat, adding assets in
emerging Asia appeared "pricey" and yields were not high enough
to attract more money.
    Most emerging Asian currencies have rallied so far this
month as the Federal Reserve launched a third round of
quantitative easing and European policymakers took steps to ease
the continent's debt crisis.
    Still, Supaat said regional units were expected to find
support as long as investors maintain hopes for more stimulus
measures from China.
    Some investors scaled back expectations for Beijing's
actions with a slight improvement in the HSBC Flash China
manufacturing purchasing managers' index (PMI).
    But Supaat said there was still a chance China would ease
policy, as the pace of the economic slowdown though stabilising,
was not very significant.
    
    WON
    The won eased as caution grew over possible intervention by
the foreign exchange authorities to stem its strength, prompting
traders to cover short dollar positions.
    The South Korean currency weakened past 1,122.8 per dollar,
the 38.2 percent Fibonacci retracement of its appreciation
between late August and early September. It may head to the 50
percent retracement of 1,125.7.
    Still, investors hesitated to sell the South Korean
currency, given foreign investors' continuous purchases of Seoul
shares.
    Dollar demand from domestic importers also slowed down,
dealers said.
    "It is difficult to buy the won when it is stronger than
1,115 per dollar. But it is also difficult to expect the won to
weaken further, given incoming liquidity," said a South Korean
bank dealer in Seoul.
    
    RINGGIT
    The ringgit turned softer, weakening past 3.0720 to the
greenback, the 38.2 percent retracement of its strengthening
between August and September.
    The Malaysian currency started the day firmer on some fund
inflows.
    Technically, the local unit is seen heading to the 50.0
percent retracement line of 3.0835.
    
    PHILIPPINE PESO
    The Philippine peso edged lower as traders booked profits as
they were wary of potential intervention by the central bank,
dealers said.
    A European bank dealer in Manila said the peso was expected
to weaken further, adding investors still appeared to hold short
dollar positions to cover.
    "The market is looking for negative news to justify
profit-taking as most of the good news has been factored in,"
the dealer said.
    "Dollar/peso has to try to the upside first and shake out
short positions before trying to test lower levels."
    
    BAHT
    The baht slid as local and foreign banks sold the Thai
currency with offers around 30.82 per dollar and 30.83.
    But traders expected domestic exporters to buy the local
currency once the selling from interbank players was completed.
        
  CURRENCIES VS U.S. DOLLAR
  Change on the day at 0710 GMT
  Currency    Latest bid   Previous day    Pct Move
  Japan yen        78.10          78.38       +0.36
  Sing dlr        1.2268         1.2242       -0.21
  Taiwan dlr      29.359         29.405       +0.16
  Korean won     1123.20        1114.80       -0.75
  Baht             30.89          30.79       -0.34
  Peso             41.80          41.61       -0.45
  Rupiah         9545.00        9530.00       -0.16
  Rupee            54.37          54.01       -0.66
  Ringgit         3.0740         3.0585       -0.50
  Yuan            6.3015         6.3093       +0.12
 
  Change so far in 2012
  Currency    Latest bid  End prev year    Pct Move
  Japan yen        78.10          76.92       -1.51
  Sing dlr        1.2268         1.2969       +5.71
  Taiwan dlr      29.359         30.290       +3.17
  Korean won     1123.20        1151.80       +2.55
  Baht             30.89          31.55       +2.14
  Peso             41.80          43.84       +4.88
  Rupiah         9545.00        9060.00       -5.08
  Rupee            54.37          53.08       -2.37
  Ringgit         3.0740         3.1685       +3.07
  Yuan            6.3015         6.2940       -0.12
 
 (Additional reporting by Lee Kyoung-ho in SEOUL and IFR
Markets' Catherine Tan; Editing by Jacqueline Wong)

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