Regional currencies in Asia inched higher on Monday on expectations central bank will focus on inflation-control amid clear signs of progress in tackling atomic crisis in Japan and on higher oil prices. With oil prices jumping on Western's strike to Libya, Asian central banks may be more keen on stemming inflation, analysts said.
Still, currency market players remained wary of possible dollar-buying intervention to check speed of strength in their currencies, after the G7 intervention against the yen last week. The Singapore dollar strengthened past 1.2700, which the Monetary Authority of Singapore (MAS) had been spotted defending, on heavy demand from funds and speculators.
The rupiah hit a fresh four-year high against the dollar on exporters' demand for settlements. The Indonesian currency strengthened to as firm as 8,725 versus the greenback, the firmest level since May 2007 hit. The Malaysian ringgit gained 0.5 percent as interbank speculators cleared dollar-long positions which they had built on higher oil prices. The ringgit also found support from speculation of further currency liberalisation by the central bank. Markets are seen pushing for dollar/ringgit stops below 3.0330 next, once 3.0380 gives way.
Offshore hedge funds' demand after billionaire investors Warren Buffett's comments on investment in South Korea and exporters bids for settlements supported the won . Still, the won failed to extend gains on importers' dollar demand for settlements with oil prices jumping amid jitters about Libya. "Buffett's comments spurred offshore players (dollar) sales and short-plays among local investors, but there is little room (for dollar/won) to fall more," said a foreign bank dealer in Seoul.
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