Peso moves higher

The Philippine peso and most emerging Asian currencies crawled higher on Tuesday, but investors showed growing reluctance to add positions in regional units as China's disappointing import data deepened worries about sluggish global growth. The peso gained on trade export figures for May and the Taiwan dollar found support from exporters' demand for settlements.
But the won slid as local importers bought dollars for payments, and amid growing concerns over faltering domestic demand in China, South Korea's top overseas market.
Imports of the world's second largest economy rose 6.3 percent in June from a year ago, data showed, less than half of a Reuters poll market forecast for 12.7 percent growth, although exports were stronger than expected.
The gloomy trade data from China pushed Asian shares lower. "We may see a knock on effect on the rest of Asia," said Suresh Kumar Ramanathan, head of regional interest rate and FX strategy at CIMB Investment Bank in Kuala Lumpur. "We tend to look at the numbers as a negative for Asia ex-Japan FX."
The peso started the domestic trade slightly firmer at 41.93. Interbank players bought peso after data showed Philippines' exports in May jumped to post their highest growth in 17 months, boding well for the country's overall growth.
Some investors were reluctant to sell dollar, saying the market players appeared to hold short dollar positions to cover and amid caution over possible intervention by the central bank to limit the peso's gains.
On Saturday, the Bangko Sentral ng Pilipinas said it had toughened the rules on its short-term special deposit instrument to curb speculators betting on the peso strengthening.
A European bank dealer in Manila said he expected the peso to remain steady between 41.70 and 42.10 to the dollar for the time being.
The Taiwan dollar firmed as exporters' buying of Taiwan dollars easily offset demand for the greenback. Local currency players showed muted reaction to China's trade data as some focused on the stronger-than-expected export figure, while foreign investors were active on both sides of the market.
The ringgit strengthened to 3.1780 per dollar as interbank players bought, but then slipped back on the China's import data and dollar buying for the non-deliverable forward fixing.
Interest in buying Singapore dollar against the ringgit also put pressure on the ringgit, dealers said. Investors were keeping an eye on inflows linked to Malaysia's IHH Healthcare Bhd's $2 billion initial public offering (IPO).
But a Malaysian bank dealer in Kuala Lumpur said the offering is unlikely to draw fresh foreign inflows as foreigners are likely to use existing funds for the IPO.