Asian currencies rise

Most emerging Asian currencies rose on Friday as short-term players bought the battered units and on exporters' demand, but they were headed for monthly losses in March on worries about the slowing global economy and higher oil prices. Despite losses in recent weeks, most regional currencies looked set for first-quarter gains against the US dollar, with the Indian rupee advancing close to 4 percent, followed closely by the Malaysian ringgit and the Singapore dollar, both up more than 3 percent.
The Indonesian rupiah posted the worst performance of the quarter, slipping 1.25 percent, while the Chinese yuan was marginally weaker. Regional currencies in the region are likely to remain under pressure in the second quarter on concerns about the global economy, especially China, dealers and analysts said.
The rupee has lost 4.1 percent against the dollar so far this month after enjoying a 8.3 percent rise during the first two months of the year, according to Reuters calculations. The rupiah has weakened 1.8 percent and the Malaysian ringgit has shed 2.2 percent. BNP Paribas currency strategist Thio Chin Loo in Singapore said the regional units would appreciate gradually in the second quarter as hopes stays alive for more easing by the US Federal Reserve. Barclays does not expect another round of quantitative easing and does not expect the Fed to start hiking interest rates before 2014, although it says longer-term US bond yields are likely to rise gradually. Still, Barclays sees emerging Asian currencies as likely to stay firm as the Fed's policy is still seen accommodative and on global liquidity, Paul Robinson, its head of global FX research, said.
"There is a lot of liquidity being pumped into the system by central banks in the US, Europe and Japan. But where is that capital go? US still does have issues. Europe has issues," Robinson told some reporters in Singapore. Olivier Desbarres, Barclay's head of FX strategy Asia Pacific ex-Japan, said the recent fears of a hard landing in China's economy appeared to be excessive.
Dollar/won fell slid as exporters' supplies for month-end settlements prompted stop-loss selling by offshore funds. Those offshore players had such positions as they expected dollar demand linked to local companies' dividend payments to foreign shareholders.
The won fell 1.3 percent in March against the dollar. US dollar/Taiwan dollar slid on financial inflows, but some local banks bought the pair near 29.500 to add long positions and on behalf of local importers. Investors were also wary of possible intervention by the central bank to defend the level, dealers said. The island's currency dipped 0.3 percent versus the greenback this month.