EM ASIA FX-Rupiah set for best day in 6 years, Asia FX gain as Fed rate hike views fade
* Rupiah hits one-month high as Indonesia bonds, stocks jump
* Indonesia c.bank deputy gov: rupiah "too far undervalued"
* Won around 3-week high; Philippine peso near 7-week peak
* Singapore dollar down on c.bank easing expectations
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, Oct 6 - Indonesia's rupiah was set for its best
day in six years on Tuesday, leading gains among emerging Asian
currencies as foreign investors sought higher yields on
expectations that the U.S. Federal Reserve may hold off raising
interest rates.
The rupiah rose 1.8 percent to 14,230 per dollar as
of 0600 GMT, which would be the largest daily gain since
September 2009, according to Thomson Reuters data.
Earlier, the rupiah jumped as much as 2.5 percent to 14,140
per dollar, its strongest since Sept. 3, as traders were wary of
possible central bank intervention to prop up the second-worst
performing Asian unit. Deputy Governor Mirza Adityaswara said
the currency was "too far undervalued".
The currency's one-month non-deliverable forwards
also strengthened to its highest since Sept. 4 on
stop-loss dollar selling by foreign investors.
Indonesian government bond prices advanced with the 10-year
yield down to 9.132 percent. Jakarta shares
rallied 2.6 percent, outperforming regional peers.
"The IDR is the carry favorite, having the only double digit
implied yield in the region," said Andy Ji, Asian currency
strategist for Commonwealth Bank of Australia in Singapore.
One-month implied yield was offered at 14.2
percent, according to Thomson Reuters data.
Despite such returns, the rupiah has lost 13 percent against
the dollar throughout this year, tumbling to its lowest since
the 1997-98 Asian financial crisis.
The currency was under pressure as a slowing Chinese economy
hurt prices for commodities. Indonesia is a major supplier of
palm oil and coal.
Bank Indonesia last week unveiled a set of measures to
stabilise the rupiah, including intervention in the forward
market.
Adityaswara said on Tuesday those steps have had a
significant impact on foreign exchange supply. The three-month
dollar/rupiah forwards dropped almost 22 percent.
A Jakarta-based currency trader said the central bank was
spotted "actively" intervening in the spot market from 14,400.
Still, traders and analysts doubted how much the rupiah
could strengthen further longer term, saying Tuesday's gain was
a result of "very short-term opportunistic trading".
"Markets remain very fragile and I will need more convincing
from a regional perspective before jumping on this bandwagon,"
said Stephen Innes, senior trader for FX broker OANDA in
Singapore.
"I suspect it is a correction on the longer term uptrend (in
dollar/Asian currencies) as growth concerns consume the region."
ASIA FX UP
Most other emerging Asian currencies rose as risk appetite
improved on fading expectations that the Fed will raise interest
rates within this year.
South Korea's won gained as much as 0.9 percent
to 1,161.8 per dollar, its strongest since Sept. 18. The won
pared some earlier gains on caution over possible intervention
by the foreign exchange authorities to stem its strength.
The Philippine peso advanced 0.4 percent to 46.31
to the greenback, its highest since Aug. 20.
Singapore's dollar was an exception, easing 0.22
percent to 1.4239 per U.S. dollar, as the central bank was
expected to ease monetary policy later this month to support
growth and inflation.
"We expect the NEER policy band to be re-centred by half a
band, equivalent to a one-off devaluation of 2 percent," DBS
said in a research note, referring to Singapore dollar's nominal
effective exchange rate.
"A shift to a zero appreciation stance would not be
inappropriate and cannot be ruled out."
The Monetary Authority of Singapore manages monetary policy
by letting the Singapore dollar rise or fall against the
currencies of its main trading partners within an undisclosed
trading band based on the NEER.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0600 GMT
Currency Latest bid Previous day Pct Move
Japan yen 120.33 120.46 +0.11
Sing dlr 1.4239 1.4207 -0.22
Taiwan dlr 32.682 33.002 +0.98
Korean won 1165.09 1172.40 +0.63
Baht 36.31 36.36 +0.14
Peso 46.35 46.48 +0.28
Rupiah 14230.00 14490.00 +1.83
Rupee 65.30 65.29 -0.02
Ringgit 4.3600 4.3808 +0.48
*Yuan 6.3571 6.3571 +0.00
Change so far in 2015
Currency Latest bid End prev year Pct Move
Japan yen 120.33 119.66 -0.56
Sing dlr 1.4239 1.3260 -6.88
Taiwan dlr 32.682 31.718 -2.95
Korean won 1165.09 1099.30 -5.65
Baht 36.31 32.90 -9.39
Peso 46.35 44.72 -3.52
Rupiah 14230.00 12380.00 -13.00
Rupee 65.30 63.03 -3.47
Ringgit 4.3600 3.4965 -19.81
Yuan 6.3571 6.2040 -2.41
* China's stock, bond, foreign exchange and commodity futures
markets will be closed Oct. 1 to 7 for a national holiday.
(Additional reporting by IFR Markets' Catherine Tan; Editing by
Simon Cameron-Moore)
