EM ASIA FX-S'pore dollar at 1-week high on policy views; month-end bids support Asia FX
* Singapore dollar up on short-covering, corp demand
* Philippine peso dips before c.bank policy meeting
* Won higher on exporters, Aramco linked dlr supplies eyed
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, March 27 (Reuters) - The Singapore dollar hit a
one-week high on Thursday as investors bet that the central bank
may keep tightening bias in a policy meeting in April, while
most emerging Asian currencies rose on month-end corporate
demand.
The Philippine peso edged lower before the
central bank's policy meeting later in the day.
It is expected to leave interest rates on hold this time,
but the chances of a rate hike in the second quarter have risen
following hawkish comments from its governor last week, Reuters
poll showed.
Singapore's dollar rose as investors covered short
positions, starting to position for the upcoming semi-annual
policy meeting in April.
The unit's strength supported the neighbouring Malaysian
ringgit.
South Korea's won gained on exporters' demand for
settlements and on a possible demand-related deal between Saudi
Arabian Oil Co (Saudi Aramco) and Korean Air Lines Co Ltd
.
"I think eventually we will see more certain dollar trend on
the stronger path but the strength is not convincing enough to
lift all dollar/Asia," said Andy Ji, Asian currency strategist
for Commonwealth Bank of Australia in Singapore.
"The outperformance of higher yielders since the start of
the year against further tapering of Fed's asset purchases point
to some resilience in the regional space," Ji said, referring to
the Federal Reserve.
Some of the emerging Asian currencies such as the Indonesian
rupiah have risen as investors sought higher yields
within the region amid improving economic fundamentals.
SINGAPORE DOLLAR
The Singapore dollar advanced as much as 0.3 percent to
1.2640 to the U.S. dollar, its strongest since March 19.
The central bank is expected to maintain tightening stance
by keeping the slope width and centre of the Singapore dollar
nominal effective exchange rate (NEER), HSBC said in a note to
clients.
The Monetary Authority of Singapore (MAS) conducts monetary
policy by managing the rise or fall of the local dollar against
the currencies of its main trading partners.
"Global economic conditions should improve and lift growth
during the second half of the year, further squeezing existing
capacity and adding to underlying inflation pressures," HSBC
said.
"The SGD should outperform ASEAN currencies on the back of
steady FX policy. The MAS has shown a preference for the SGD
NEER to trade in the strong side of the band which will help
support the SGD," it added referring to the Singapore dollar.
The city-states currency, however, is seen facing a chart
resistance area around 1.2630 against the U.S. dollar, analysts
said.
It has the 76.4 percent Fibonacci retracement at 1.2631 of
its depreciation between February and March.
The Singapore dollar also has a 100-day moving average at
1.2636. It has been weaker than the average since mid-December.
RINGGIT
The ringgit rose on month-end corporate demand and tracking
the Singapore dollar's strength.
Malaysian importers bought the U.S. dollar around 3.2900,
limiting the ringgit's gains, traders said.
The Malaysian unit also slid to the neighbouring
Singapore dollar.
WON
The won started the day weaker but turned higher on demand
from exporters for month-end settlements.
The South Korean currency may strengthen further as such
corporate flows may intensify as the month-end is approaching,
while some traders said its gains will be limited around 1,070
for now, given a weaker Chinese yuan.
"The won is likely to get a temporary booster, but it may
foam a chart resistance around 1,071," said a South Korean bank
trader in Seoul, adding some offshore funds bought dollar around
the level.
The won has the 50.0 percent Fibonacci retracement at
1,070.6 per dollar of its depreciation between February and
March.
Investors were keeping an eye on possible dollar supplies
related to Korean Air decision back in December to sell about 30
million shares in South Korean refiner S-Oil.
The airline aims to raise 2.2 trillion won ($2.1 billion)
from the deal as it sells the shares to Saudi Aramco, which
already owns a controlling 35 percent stake in S-Oil.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0340 GMT
Currency Latest bid Previous day Pct Move
Japan yen 102.12 102.05 -0.07
Sing dlr 1.2647 1.2676 +0.23
Taiwan dlr 30.539 30.605 +0.22
Korean won 1071.90 1075.00 +0.29
Baht 32.55 32.56 +0.03
Peso 44.98 44.97 -0.03
Rupiah 11435.00 11405.00 -0.26
Rupee 60.21 60.14 -0.12
Ringgit 3.2910 3.2995 +0.26
Yuan 6.2145 6.2094 -0.08
Change so far in 2014
Currency Latest bid End prev year Pct Move
Japan yen 102.12 105.28 +3.09
Sing dlr 1.2647 1.2632 -0.12
Taiwan dlr 30.539 29.950 -1.93
Korean won 1071.90 1055.40 -1.54
Baht 32.55 32.86 +0.95
Peso 44.98 44.40 -1.30
Rupiah 11435.00 12160.00 +6.34
Rupee 60.21 61.80 +2.64
Ringgit 3.2910 3.2755 -0.47
Yuan 6.2145 6.0539 -2.58
($1 = 1,074.95 Won)
(Additional reporting by Yena Park in Seoul; Editing by Anand
Basu)
