Rupiah at seven-year high

Investors hunting for higher yield lifted the Indonesian rupiah to a seven-year high on Monday, while the Malaysian ringgit and the Thai baht also rose as disappointing US job data boosted views that the dollar will remain under pressure for some time.
Investors cautiously resumed betting on a rise in regional currencies on expectations that US policymakers will now keep interest rates near zero for a longer period of time, though trade in Asia was thin with financial markets in China, Hong Kong, Taiwan and South Korea closed for holidays.
Regional currencies found some support from hopes for fresh aid for Greece, but investors were reluctant to buy them aggressively again on concerns over the spreading impact of a US slowdown. Despite expectations for a softer dollar, players remain doubtful on how further emerging Asian currencies can rise. Regional authorities will be less willling to allow their currencies to rise if the export outlook is growing cloudy, dealers said.
The rupiah hit a seven-year high against the dollar on inflows for bond settlements in thin trading. The Indonesian currency strengthened to as firm as 8,500 versus the greenback, the strongest since March 2004.
Last week, Indonesia's central bank governor said he expects the rupiah to trade between 8,500 per dollar and 9,000 to the end of 2011. The rupiah has risen 5.9 pct per dollar so far this year, the best performer among emerging Asian currencies, on views that the country is seen using a strong currency to contain inflation. The ringgit strengthened past 3.0050 per dollar, which dealers suspected the central bank of defending on a firm euro.
But the Malaysian currency gave up some gains as investors covered dollar-short positions. The baht also gained but it erased some rises as it neared technical resistance levels and on profit-taking by foreign funds in Thailand's stock market. The Thai currency briefly had broke through 30.19 per dollar, a 55-day moving average, but failed to stay stronger than the level. It also has a resistance at 30.15, the 50 percent Fibonacci retracement of its weakening trend between late April and May.