SINGAPORE: The Philippine peso hovered around its strongest level in more than 4-1/2 years on Wednesday after stronger growth data, while most other emerging Asian currencies slid on worries about the looming US fiscal crisis and doubt on the Greece debt deal.
The peso started the day softer as risk appetite eased, but turned higher to 40.855 per dollar, compared to the previous session high of 40.850, its firmest since March 2008.
The Philippine economy picked up more than expected in the third quarter, as strong domestic demand kept it relatively insulated from the global downturn.
"The peso should still appreciate going into the next year," said a foreign bank dealer in Manila, adding the data dims the chances for another rate cut next month.
"There might be some pull back in risk positions as people have priced in good news and the peso may weaken to 41.30-41.50 in short term. But I will short dollar/peso there," the dealer added.
BNP Paribas currency strategist Thio Chin Loo in Singapore expected the peso to strengthen to 40.500 by the end of this year and to head to 40.250 in 2013.
But the peso failed to stay firmer for the day as dealers said the central bank was spotted buying dollars to stem further appreciation in the best performing emerging Asian currency in 2012 with a 7.2 percent gain against the dollar.
Some investors also took profit with short-term peso forwards quoted at a discount.
Most emerging Asian currencies edged lower on worries about the US "fiscal cliff" of tax increases and spending cuts due to take effect from early next year. The US Congress pushed toward compromise on Tuesday but an agreement still appeared elusive, despite growing pressure from business interests for action.
Investors were also sceptical about how Greece will implement necessary reforms.
Still, emerging Asian currencies are likely to appreciate once investors see signs of a resolution in the US budget issues, dealers and analysts said.
Philippines' solid growth indicated economic fundamentals in emerging Asia stay stronger than developed markets and regional economies may find more support from recoveries in the United States and China -- Asia's major exports market.
"The fiscal cliff will put a brake on stocks and risky currencies. But if we see any clues for an agreement, they will recoup recent discounts and enjoy a relief rally," said Chris Lee, managing director of Samsung Asset Management in Singapore.
WON
The won eased as the foreign exchange authorities were suspected of buying dollars, dealers said.
South Korean exporters bought the currency for month-end settlements, limiting its downside.
"The won is unlikely to strengthen from here despite exporters demand, given growing caution over intervention," said a South Korean bank dealer in Seoul.
RINGGIT
The ringgit slid as investors covered dollar-short positions on weak risk sentiment.
The Malaysian currency is seen having a chart support around 3.0550 per dollar. Near the level, it has the 38.2 percent Fibonacci retracement of its appreciation since Nov. 16 and the bottom of the daily Ichimoku cloud.
Once the support is cleared, the ringgit may head to 3.0592, the 50.0 percent retracement.
A Kuala Lumpur-based dealer said, the ringgit is likely to clear the technical support of 3.0550 and weaken to 3.0600 if the euro slides below 1.2900 to the dollar.
The euro stayed around 1.2920.
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