Rupiah, baht hit one-week low

The Indonesian rupiah and the Thai baht hit a one-week low against the dollar on Tuesday, pressured by offers related to foreign investors' sales of assets in the countries. The Philippine peso also lost ground as investors covered dollar-short positions after it broke through support lines and on risk aversion amid worries about the eurozone debt crisis.
The rupiah and the baht are seen staying weaker as investors are likely to cover more dollar-short positions on lingering concerns over growing inflationary pressure in the countries and the eurozone's sovereign debt woes, analysts and dealers said.
"Technically, the rupiah and the baht have more room to fall a bit further as they are not oversold yet. Players will reduce positions in the currencies on inflation and the eurozone worries," said Jeong My-young, a currency strategist at Samsung Futures Inc in Seoul. The euro erased some earlier losses, but market players doubted it would rise further with uncertainty growing over whether officials will agree to beef up a eurozone safety fund this week.
The baht hit its weakest in a week on heavy sales from foreign investors, led by a German Bank, and a persistent dollar shortage in the local money market. Traders said the sales from foreign investors were related to their recent domestic stock sales. The local currency weakened to as soft as 30.75 per dollar, the softest since January 11, breaking through 30.60 resistance. The rupiah slid to as weak as 9,069 versus the dollar, its softest level since January 11 as risk aversion and extended selling in rupiah bonds continued to weigh on the local currency.
The central bank was spotted selling dollars to cap the currency's weakness. The Philippine peso fell as investors covered dollar-short positions after dollar/peso broke through around 44.40-50 per dollar. Continued unwinding of peso bonds and risk reduction also hurt sentiment for the local currency, while the central bank was spotted selling dollar to stem the peso's weakness, dealers said.
"It looks like a significant technical breakout was a big factor that contributed to today's move. Dollar/peso trading above 44.50 triggered short-covering and buying of the dollar," said a Manila-based dealer said. Another dealer said he spotted the central bank's dollar-selling intervention, but interests in dollar purchases was strong.