The Thai baht slid to its lowest level in more than four months against the dollar on Friday, weighed down by weaker equities and renewed concerns over political stability. Both the baht, the worst performer among emerging Asian currencies this year, and the rupee are expected to fall more, analysts and dealers said.
"We think the rupee continues to have the burden of inflation baggage, while the baht may still be suffering from rotational plays on the equity front, not to mention background political uncertainty," said Emmanuel Ng, an economist at OCBC Bank in Singapore. The Singapore dollar and the Malaysia ringgit also fell as investors covered dollar-short positions before a weekend and the Lunar New year holidays next week.
Meanwhile, emerging Asian currencies showed muted reactions to Standard & Poor's cut in Japan's credit rating on Thursday. Dollar/baht rose to as high as 31.17, the highest since September 8 last year. Traders and analysts dismissed rumours of a coup circulating in the market. Deputy Prime Minister Suthep Thaugsuban said a coup was "just not conceivable".
Baht has lost 3 percent against the dollar so far this year, the worst performer among emerging Asian currencies after having been one of the biggest gainers in 2010. The Singapore dollar shed 0.1 percent against the dollar after rising for five consecutive sessions as investors covered US dollar-short positions before the weekend.
The ringgit has risen 1 percent against the dollar so far this year, outperforming currencies of countries where investors are worried about rising prices, as the Malaysia central bank is seen to have a better handle on inflation. The Taiwan dollar hovered close to breaking the T$29 per dollar to the US dollar line for the first time in 13 years.
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