The Philippine peso and the Thai baht fell against the dollar on Friday, extending losses after a powerful earthquake hit north-east Japan, triggering a 10-metre tsunami prompted investors to cut positions in the riskier currencies. Earlier China's stronger-than-expected output data alleviated investors' concerns over the health of the world's No 2 economy after it reported weak February figures.
But news of the massive quake hit the yen and other Asian currencies. "That is another reason to encourage a risk-off environment," said Pin Ru Tan, emerging markets currency and rates strategist at the Royal Bank of Scotland in Singapore. The yen extended losses against the dollar and the euro while Nikkei futures in Singapore tumbled more than 3 percent. The peso weakened past 43.60 per dollar where the Philippine's central bank had been spotted selling dollars to check the currency's falls.
Investors rushed to cover dollar-short positions after the quake. A Manila-based dealer said he has not seen dollar-sales by the central bank yet. The one-month dollar/won non-deliverable forward (NDF) rose to as high as 1,130 after the earthquake. Earlier, the spot won eased, but found strong support from exporters' demand for settlements and as dealers and corporates were wary of officials stepping into the market to support the won around 1,130 to the dollar. The baht reversed gains on a bout of risk aversion and very aggressive central bbank intervention on Thursday Traders estimated the Bank of Thailand bought at least $500 million between 30.25-30.24 in the previous session.
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