SINGAPORE: Most emerging Asian currencies held steady or edged higher on Monday, supported by data that showed a pick-up in Chinese manufacturing activity and underscored hopes for a revival in the world's second-largest economy.
The dollar's decline against some major currencies, including the euro, also helped bolster emerging Asian currencies, market players said.
"Asian currencies are benefiting from the market's overall risk-on tone and dollar-selling," said Satoshi Okagawa, senior global markets analyst at Sumitomo Mitsui Banking Corporation in Singapore.
The pace of activity in China's vast manufacturing sector quickened for the first time in 13 months in November, a survey of private factory managers found, adding to evidence that the world's second-largest economy is reviving after seven quarters of slowing growth.
That came on the heels of another upbeat survey released over the weekend. China's official manufacturing purchasing managers' index rose to a seven-month high in November, the National Bureau of Statistics said on Saturday.
Emerging Asian currencies have also found support after Greece's international lenders clinched an agreement last week on reducing its debt, opening the way for Athens to get urgently needed loans.
A near-term focal point remains the fate of negotiations in Washington to avoid the so-called US "fiscal cliff" of tax hikes and spending cuts due to come into effect in early 2013.
INDIAN RUPEE
The rupee underperformed, easing 0.5 percent to 54.54 against the dollar.
Dollar-buying by local importers including oil firms weighed on the rupee. Oil companies are the largest buyers of dollars in India's domestic currency market.
India's manufacturing sector grew at its fastest pace in five months in November, boosted by strong export orders and a surge in output, a business survey showed on Monday. But the sector is still a long way from the robust growth seen before the onset of the financial crisis in 2007.
PHILIPPINE PESO
Remittance inflows from overseas workers and the market's generally dollar-bearish tone helped to support the peso.
The peso, however, could come under pressure against the dollar in the near term on position squaring, and also due to the potential for dollar demand from corporate clients, said a trader for a European bank.
INDONESIAN RUPIAH
The rupiah was seen likely to come under pressure after data showed that Indonesia posted a record $1.54 billion trade deficit in October as exports fell more than expected and imports surged.
In addition to such negative economic fundamentals, the rupiah could fall if investor risk appetite weakens in the near term, said Andy Ji, Asian currency strategist for Commonwealth Bank of Australia in Singapore.
"The Indonesian rupiah normally underperforms when risk appetite is weak, a scenario that is likely to play out in coming weeks as the global financial markets try to overcome the US 'fiscal cliff'," Ji said.
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