Baht, peso fall

Most emerging Asian currencies were poised to finish the week lower amid a sluggish outlook as the Thai baht on Friday led losses among regional units on disappointing US economic data and sustained worries about the eurozone's debt crisis.
Investors will be watching the monetary policy meetings of the Federal Reserve and Bank of Japan next week, but dealers and analysts said the central banks were unlikely to provide emerging Asian currencies with much of a boost unless they ease policy further.
Governor Masaaki Shirakawa said the Bank of Japan would continue monetary easing until a 1 percent inflation target is in sight, although a senior International Monetary Fund official said the central bank should be more accommodative. The remarks boosted expectations that the BoJ on April 27 could further ease its already super-loose monetary policy, putting pressure on the yen.
For the week, the Indian rupee was the worst-performing emerging Asian currency, having lost 1.4 percent versus dollar so far, according to Thomson Reuters data. The rupee was hit by a growing current account deficit, slowing growth and reduced hopes for another rate cut by the central bank due to inflationary risks. The baht followed the Indian currency with a 0.5 percent slide.
Thai corporates' demand for yen/baht lifted dollar/baht on Friday, while onshore players bought the dollar, dealers said. Fixing-related demand also supported dollar/baht, they added. Local importers bought the yen on dips and dealers expect to see more of such demand. The Japanese currency stayed weak on expectations for more easing by the BoJ. Yen/baht rose 0.2 percent to 37.854.
Dollar/baht is expected to rise further, probably to 31.06, but it may not be easy to get there as traders are seen holding long dollar positions, dealers said. The pair has the 50 percent Fibonacci retracement of its January-February slides and the top of the daily Ichimoku cloud around that level. Dollar/won gained on demand from South Korean importers and as foreign investors extended their selling streak in the stock market to a fifth consecutive session.
Foreign investors sold a net 327.8 billion won ($288.01 million) in Seoul's main stock market after dumping a combined net 632.6 billion won during the previous four consecutive sessions. Dollar/Philippine peso rose on fixing-related demand and as interbank players covered short positions, dealers said. A European bank dealer in Manila said market players appeared to still hold short dollar positions and the pair is seen rising more, probably to 42.800.