EM ASIA FX-Won, ringgit buffeted by renewed economic fears
Mon Jul 19, 2010 12:25pm IST
By Kevin Yao
SINGAPORE, July 19 (Reuters) - The South Korean won and
Malaysian ringgit fell on Monday as investors shed risky assets
after subdued U.S. inflation and slumping consumer sentiment
fanned concerns about the global economic recovery.
The euro pulled back from two-month highs while Asian
stocks fell, tracking the Wall Street after U.S. data showed
consumer prices fell for the third straight month in June while
consumer sentiment dropped to a near one-year low.
[ID:nSGE66I03S]
Markets are anxiously awaiting the results of stress tests
on European banks due out on Friday. [ID:nN16109586]
WON
The won gapped down at opening and fell as much as 1.3
percent to 1,218,8 per dollar -- the lowest since July 7 -- as
market players covered dollar-short positions and foreign
investors sold local stocks.
But the won's decline was mitigated by local exporters who
bought the unit on dips for settlements.
"I see many flows linked to stop-loss moves, especially
from offshore playes. But exporters' deals reduce their
impact," said a foreign bank dealer.
The won, the worst performing currency in Asia this year,
has lost just over 4 percent against the dollar since January.
Seoul shares fell 0.4 percent on Monday as foreign
investors sold a net 42.1 billion won worth of stocks.
Foreigners had bought a combined net 2.68 trillion won in
shares during the previous seven consecutive sessions.
RINGGIT
The ringgit MYR= shed as much as 0.8 percent to 3.229 per
dollar, the lowest in two weeks, tracking weaker stocks and
euro on renewed jitters over the global economy.
"Dollar/ringgit is quite biddish as Asian equities fall in
sympathy with U.S. and European stocks last Friday," said a
trader in Kuala Lumpur.
Still, ringgit remains the best performer in emerging Asia
in 2010 with a gain of 6 percent vs dollar so far this year
thanks to its increased yield advantage helped by the central
bank's repeated interest rate rises.
The ringgit lost half of a percent to 2.3385 to Singapore
dollar SGDMYR=R, its lowest since June 30.
Meanwhile, one-month dollar/ringgit non-deliverable
forwards IDR1MNDFOR= jumped to 3.2345 from 3.2270 late on
Friday.
RUPEE
Onshore dollar/rupee premiums edged down across tenors as
investors saw an improvement in banking system liquidity, while
weakness in spot rupee prompted exporters to receive forwards.
"With the spot dollar/rupee higher, premiums are lower. In
general, this could well be the last week of money tightness.
Next week's (bond) redemption will provide liquidity," said R.
K. Gurumurthy, head of treasury at ING Vysya Bank.
One-year onshore dollar premiums INR1Y= traded at 153
points from 156.25 points at previous close.
Spot rupee INR=IN hit a 2-week low of 47.10 per dollar.
"If liquidity moves positive, then even a 25-basis point
(rate) hike will not prevent the 1-year premium from moving to
130 points," Gurumurthy said.
Traders are bracing for another 25-basis point hike in key
interest rates when the central bank's reviews policy July 27.
YUAN
Dollar/yuan non-deliverable forwards (NDFs) rose after the
Chinese central bank set the yuan mid-point at a
weaker-than-expected level, reflecting its policy bias to
control the pace of currency appreciation.
The People's Bank of China set the yuan's reference rate
CNY=SAEC against the dollar at 6.7800, down sharply from
Friday's 6.7718.
"There's still more upside room in NDFs amid weak client
flow," said an FX trader at a mid-sized Chinese bank in
Shanghai.
One-year dollar/yuan NDFs CNY1YNDFOR= climbed to 6.6730
from 6.6590 late on Friday.
That priced in 12-month yuan appreciation of 1.60 percent
compared with 1.69 percent on Friday.
Three-month dollar/yuan NDFs rose to 6.7700 from Friday's
6.7620 and last Tuesday's 6.7545, a three-week low.
The yuan has gained 0.7 percent since its depegging from
the dollar a month ago.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0642 GMT
Currency Latest bid Previous day Pct Move
Japan yen 86.63 86.59 -0.05
Sing dlr 1.3798 1.3772 -0.19
Taiwan dlr 32.162 32.143 -0.06
Korean won 1214.65 1203.50 -0.92
Baht 32.28 32.22 -0.19
Peso 46.47 46.28 -0.42
Rupiah 9068.00 9032.00 -0.40
Rupee 47.07 46.78 -0.62
Ringgit 3.2260 3.2045 -0.67
Yuan 6.7779 6.7750 -0.04
Change so far in 2010
Currency Latest bid End prev year Pct Move
Japan yen 86.63 92.90 +7.24
Sing dlr 1.3798 1.4053 +1.85
Taiwan dlr 32.162 32.030 -0.41
Korean won 1214.65 1164.50 -4.13
Baht 32.28 33.32 +3.22
Peso 46.47 46.20 -0.58
Rupiah 9068.00 9420.00 +3.88
Rupee 47.07 46.54 -1.13
Ringgit 3.2260 3.4220 +6.08
Yuan 6.7779 6.8270 +0.72
(Additional reporting by Cheon Jong-woo in SEOUL, Karen Yeung
in SHANGHAI and Swati Bhat in MUMBAI; Editing by Kazunori
Takada)
Mon Jul 19, 2010 12:25pm IST
By Kevin Yao
SINGAPORE, July 19 (Reuters) - The South Korean won and
Malaysian ringgit fell on Monday as investors shed risky assets
after subdued U.S. inflation and slumping consumer sentiment
fanned concerns about the global economic recovery.
The euro pulled back from two-month highs while Asian
stocks fell, tracking the Wall Street after U.S. data showed
consumer prices fell for the third straight month in June while
consumer sentiment dropped to a near one-year low.
[ID:nSGE66I03S]
Markets are anxiously awaiting the results of stress tests
on European banks due out on Friday. [ID:nN16109586]
WON
The won gapped down at opening and fell as much as 1.3
percent to 1,218,8 per dollar -- the lowest since July 7 -- as
market players covered dollar-short positions and foreign
investors sold local stocks.
But the won's decline was mitigated by local exporters who
bought the unit on dips for settlements.
"I see many flows linked to stop-loss moves, especially
from offshore playes. But exporters' deals reduce their
impact," said a foreign bank dealer.
The won, the worst performing currency in Asia this year,
has lost just over 4 percent against the dollar since January.
Seoul shares fell 0.4 percent on Monday as foreign
investors sold a net 42.1 billion won worth of stocks.
Foreigners had bought a combined net 2.68 trillion won in
shares during the previous seven consecutive sessions.
RINGGIT
The ringgit MYR= shed as much as 0.8 percent to 3.229 per
dollar, the lowest in two weeks, tracking weaker stocks and
euro on renewed jitters over the global economy.
"Dollar/ringgit is quite biddish as Asian equities fall in
sympathy with U.S. and European stocks last Friday," said a
trader in Kuala Lumpur.
Still, ringgit remains the best performer in emerging Asia
in 2010 with a gain of 6 percent vs dollar so far this year
thanks to its increased yield advantage helped by the central
bank's repeated interest rate rises.
The ringgit lost half of a percent to 2.3385 to Singapore
dollar SGDMYR=R, its lowest since June 30.
Meanwhile, one-month dollar/ringgit non-deliverable
forwards IDR1MNDFOR= jumped to 3.2345 from 3.2270 late on
Friday.
RUPEE
Onshore dollar/rupee premiums edged down across tenors as
investors saw an improvement in banking system liquidity, while
weakness in spot rupee prompted exporters to receive forwards.
"With the spot dollar/rupee higher, premiums are lower. In
general, this could well be the last week of money tightness.
Next week's (bond) redemption will provide liquidity," said R.
K. Gurumurthy, head of treasury at ING Vysya Bank.
One-year onshore dollar premiums INR1Y= traded at 153
points from 156.25 points at previous close.
Spot rupee INR=IN hit a 2-week low of 47.10 per dollar.
"If liquidity moves positive, then even a 25-basis point
(rate) hike will not prevent the 1-year premium from moving to
130 points," Gurumurthy said.
Traders are bracing for another 25-basis point hike in key
interest rates when the central bank's reviews policy July 27.
YUAN
Dollar/yuan non-deliverable forwards (NDFs) rose after the
Chinese central bank set the yuan mid-point at a
weaker-than-expected level, reflecting its policy bias to
control the pace of currency appreciation.
The People's Bank of China set the yuan's reference rate
CNY=SAEC against the dollar at 6.7800, down sharply from
Friday's 6.7718.
"There's still more upside room in NDFs amid weak client
flow," said an FX trader at a mid-sized Chinese bank in
Shanghai.
One-year dollar/yuan NDFs CNY1YNDFOR= climbed to 6.6730
from 6.6590 late on Friday.
That priced in 12-month yuan appreciation of 1.60 percent
compared with 1.69 percent on Friday.
Three-month dollar/yuan NDFs rose to 6.7700 from Friday's
6.7620 and last Tuesday's 6.7545, a three-week low.
The yuan has gained 0.7 percent since its depegging from
the dollar a month ago.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0642 GMT
Currency Latest bid Previous day Pct Move
Japan yen 86.63 86.59 -0.05
Sing dlr 1.3798 1.3772 -0.19
Taiwan dlr 32.162 32.143 -0.06
Korean won 1214.65 1203.50 -0.92
Baht 32.28 32.22 -0.19
Peso 46.47 46.28 -0.42
Rupiah 9068.00 9032.00 -0.40
Rupee 47.07 46.78 -0.62
Ringgit 3.2260 3.2045 -0.67
Yuan 6.7779 6.7750 -0.04
Change so far in 2010
Currency Latest bid End prev year Pct Move
Japan yen 86.63 92.90 +7.24
Sing dlr 1.3798 1.4053 +1.85
Taiwan dlr 32.162 32.030 -0.41
Korean won 1214.65 1164.50 -4.13
Baht 32.28 33.32 +3.22
Peso 46.47 46.20 -0.58
Rupiah 9068.00 9420.00 +3.88
Rupee 47.07 46.54 -1.13
Ringgit 3.2260 3.4220 +6.08
Yuan 6.7779 6.8270 +0.72
(Additional reporting by Cheon Jong-woo in SEOUL, Karen Yeung
in SHANGHAI and Swati Bhat in MUMBAI; Editing by Kazunori
Takada)