Most emerging Asian currencies turned lower on Tuesday, hurt by weaker-than-expected China import growth while the won came under more pressure after North Korea said a planned long-range rocket launch would go ahead as planned. Regional units initially rose as China swung to a higher-than-expected trade surplus, but the focus soon shifted to the slower-than-expected import growth, encouraging market players to take profits on those earlier gains.
Investors were also hesitant to chase regional currencies higher ahead of China's growth data due out on Friday, which is likely to show the slowest quarter of growth in nearly three years and ahead of policy meetings by Asian central banks. "I don't expect the single month's exports number can boost Asian currencies much ahead of Friday," said Frances Cheung, senior strategist for Credit Agricole CIB in Hong Kong.
Central banks in Singapore and South Korea are scheduled to hold policy meetings on Friday and Bank Indonesia will meet on Thursday. In addition, South Korea holds parliamentary elections on Wednesday. Dollar/won rose as investors kept covering short positions on escalating worries about North Korea's rocket launch this month. The reclusive country will complete preparation to launch a long-range rocket by the end of Tuesday, an official said.
One-month and one-year dollar/won non-deliverable forwards hit session highs. Dollar/baht slid on sales by Japanese players, which appeared to be insurance-linked inflows, dealers said. Some traders said Japanese investors had a fair amount of sell orders lined up around 31.060, which is near its April 4 high and is the top of its daily Ichimoku cloud. Its 100-day moving average lies at 31.037.
US dollar/Singapore dollar edged down on speculation that Singapore's central bank might tighten monetary policy this week and on hopes that more buying of Singapore bonds would emerge. Dollar/ringgit turned higher on short-covering as the euro and the Australian dollar retreated. Earlier, dollar/ringgit fell to as low as 3.0590, a notch higher than 3.0585, which is the 50 percent Fibonacci retracement of its gains this month.