Most Asian currencies dip

Most emerging Asian currencies dipped on Thursday due to a firm dollar backed by higher US bond yields on optimism over recovery in the world's top economy, while worries about a slowing Chinese economy also weighed. The Federal Reserve this week upgraded its outlook for the United States as a stream of data signalled a sustained recovery. On the other hand, China's Premier Wen Jiabao said on Wednesday that the world's second-biggest economy must embrace slower growth.
"This (emerging Asian currencies' slide) is just a knee jerk reaction...Sentiment wise, there is no risk-off yet," said a European bank dealer in Manila. "It's more of USD bullishness. At a certain point, USD will be overbought against Asian currencies," he added. But the trader said emerging Asian currencies would come under more pressure if US inflation data due on Friday weakens hopes for more policy easing from the Fed.
"Markets started moderating bullish Asian FX again on higher USD yields and better US growth prospects," said BNP Paribas currency strategist Thio Chin Loo in Singapore. Dollar/won hit an eight-week high on demand from offshore funds, but South Korean exporters including shipbuilders did not miss the chance to sell the pair on rallies.
Earlier, the pair rose to 1,132.5, the highest since January 20, a notch below the average which currently stands at 1,132.9. It has been trading below the average since late January. "Its upside is seen capped during the local market on exporters. But it will try to keep rising in overnight trades," said a senior foreign bank dealer in Seoul.
Dollar/Philippine peso briefly rose to 43.170 above a 200-day moving average, which comes at 43.107, on short-covering, dealers say. But the pair erased much of the gains as the euro rebounded in the afternoon. US dollar/Singapore dollar fell as investors bought the city-state's currency, Wednesday's worst performing emerging Asian currency on dips. But the pair found support at a 55-day moving average, which currently stands at 1.2653. Some offshore players bought US dollar/Singapore dollar around the level.