Asian emerging currencies gained on Tuesday amid hopes policymakers will find a solution to avoid a default by Greece, while purchases by a foreign central bank to buy South Korean bonds helped the won strengthen. These currencies have been choppy in recent times, gaining sharply earlier this year as investors chased their stronger fundamentals compared with their western peers, only to dump them when euro zone debt fears gained momentum.
Their outlook remains uncertain amid Greece debt worries, especially after Fitch Ratings said it would regard a voluntary rollover of the country's sovereign bond maturities as a default and would cut the credit rating appropriately. The won outperformed its Asian peers as dealers cited bond inflows from an Asian central bank and short-term speculators sold dollars to stop losses.
The rupiah rose, but found resistance at a 55-day moving average line of 8,580 per dollar on corporate demand and bond outflows. Speculators also covered short-positions, dealers say. The Indonesian currency has room to weaken further, probably to 8,630, the low of Apr 27, if the pair stay weaker than the 55-day moving average.
The rupiah is the second-best performer among emerging Asian currencies with a 4.8 percent gain against the dollar on the country's inflation fighting with a firm currency. The ringgit extended gains, tracking the euro' s rebounds to above 1.4350 per dollar.