Most emerging Asian currencies slid on Friday to cut some their gains for the week, as the dollar made broad gains after the European Central Bank chief reasserted his readiness to provide further stimulus for the euro zone economy if necessary. The Philippine peso fell to its weakest in more than five weeks, as foreigners withdrew from stocks due to uncertainty over who will win next month's presidential election. South Korea's won and Malaysia's ringgit tracked their overnight weakness in non-deliverable forwards markets .
The dollar index - measuring the greenback's performance against a six major currencies - held firm after ECB held policy steady on Thursday and President Mario Draghi on Thursday rebuffed German criticism of his cheap money policies. Emerging Asian currencies came under further pressure as regional equities slid on disappointing earnings from US bluechip companies. Regional units are likely to stay soft next week due to caution ahead of monetary policy meetings of the United States and Japan.
The Federal Reserve holds a two-day monetary policy meeting starting from Tuesday, while Bank of Japan policymakers, who are expected to consider easing further, will meet on Wednesday and Thursday. "Markets may take more profits from Asian currencies as the Fed could signal a June rate hike," said Yuna Park, currency and bond analyst at Dongbu Securities in Seoul. "The BOJ could ease further due to a stronger yen and earthquakes. But it is unlikely automatically spur carry trades as Japanese insurers could sell overseas assets to make insurance payments on the disasters."
PESO DOWN The peso slid as much as 0.3 percent to 46.595 per dollar, its weakest since March 16. The Philippine currency has lost 1.1 percent so far this week, which would be the largest weekly loss since mid-January, Thomson Reuters data showed. Foreign investors were set to become net sellers in Manila stocks this week, having dumped a net 1.24 billion peso ($26.6 million) in the previous four sessions, according to the Philippine Stock Exchange data. On a weekly basis, they were net sellers of local equities in the previous two weeks.
Investors fear that whoever wins the May 9 election could find it difficult to generate the economic momentum built up during President Benigno Aquino's six-year single term. "USD/PHP maintains its biddish bias up till the elections. It only seems that the markets are just now pricing in some political premium into the markets," a senior Philippine bank trader in Manila said. The trader said the peso could weaken to 47.500 per dollar.
Still, analysts said the peso has chart support levels at 46.635, a 200-day moving average, and 46.702, the 38.2 percent Fibonacci retracement of its appreciation from January to April.
SINGAPORE DOLLAR GAINS Most emerging Asian currencies were poised to report weekly gains as oil prices were set for one of their largest weekly rises this year. The dollar index was on the course for a slight loss for the week. The Singapore dollar led regional appreciation, having risen 0.7 percent against the US Dollar so far this week. Investors unwound bearish bets in regional underperformer last week when the currency lost 0.6 percent as the Singapore's central bank on April 14 unexpectedly eased monetary policy.
The currency also found support as traders cited inflows linked to Alibaba Group Holding Ltd's acquisition of an online retailer based in the city-state for about $1 billion.
The won has gained 0.4 percent against the US dollar so far this week as some analysts said chances of a South Korea's central bank interest rate cut eased. The foreign exchange authorities were expected to allow more appreciation ahead of a US Treasury report on currency practices of its major trading partners. The Taiwan dollar was also up 0.1 percent throughout this week. India's rupee has gained 0.2 percent so far this week on custodian inflows.
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