* Malaysia Q4 GDP growth beats f’cast; c/a surplus jump
* Rupiah gains; Indonesia c.bank seen cutting interest rate
* Won ends local trade weaker as offshore funds sell for
hedge
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, Feb 18 (Reuters) – The Malaysian ringgit advanced
more than 1 percent on Thursday, leading gains among emerging
Asian currencies, as a surge in oil prices and
better-than-expected fourth-quarter data eased concerns about
Southeast Asia’s third-largest economy.
Regional currencies also found support as Federal Reserve
policymakers indicated slower U.S. interest rate hikes.
Malaysia’s economy grew 4.5 percent in the fourth quarter
from a year earlier, slowing from the third quarter but beating
market expectations. Its current account surplus in the
October-December period more than doubled from the previous
three months.
After the data, the ringgit rose as much as 1.6
percent to 4.1500 per dollar.
“The economic data supported the ringgit for now, but I
doubt oil price rallies are sustainable,” said Qi Gao, an
emerging Asian currency strategist for Scotiabank in Hong Kong.
Gao recommended a cautious approach on the ringgit, saying
the currency is seen moving between 4.1000-4.3000. It has a
chart resistance at a 200-day moving average at 4.1059.
The ringgit closely tracks crude prices as Malaysia is a
major supplier of palm oil and liquefied natural gas.
Crude futures rose in Asian trade after Iran welcomed plans
by Russia and Saudi Arabia to cap production, while analysts
said the move would not lead to any output cuts and Tehran
offered no action of its own.
In addition to higher oil prices, emerging Asian currencies
rose on speculation that the Fed is stepping further away from
plans to raise interest rates several times this year.
St. Louis Fed President James Bullard, one of the U.S.
central bank’s most prominent advocates of higher borrowing
costs, declared it “unwise” to move any further in light of weak
inflation and global volatility.
Minutes of the January Fed’s meeting released on Wednesday
showed that policymakers worried about tighter global financial
conditions hitting the U.S. economy and considered changing
their planned path of policy tightening in 2016.
Still, some analysts warned against too much optimism toward
Asian currencies.
“We are in for a period of range trading for most Asian
currencies. If the U.S. data continues to improve, market will
start to price Fed rate hikes back in, which will see renewed
dollar strength, weighing on Asian currencies again,” said Khoon
Goh, senior FX strategist for ANZ in Singapore.
“The oil bounce is positive for risk sentiment, and if that
leads to some calm in markets, then that certainly brings Fed
rate hikes back on the table.”
RUPIAH
Indonesia’s rupiah gained, tracking broad strength
in regional currency.
The official Jakarta Interbank Spot Dollar Rate,
which the central bank introduced in 2013 to manage exchange
rate fluctuations, was fixed at 13,479, stronger than the
previous 13,479.
The rupiah pared some of earlier gains ahead of Bank
Indonesia’s policy decision later in the day. The central bank
is expected to cut its benchmark interest rate for the second
time this year to support growth in Southeast Asia’s largest
economy.
WON
South Korea’s won started the day firmer on
improving risk appetite, but failed to hang on to the gains and
ended the local session weaker as offshore funds dumped it for
currency hedging.
“Amid aggressive hedge among real money names, some offshore
funds such as macro accounts reacted to the won’s weakness,”
said a foreign bank trader in Seoul.
“Short-term speculators could join the move,” the trader
added.
The foreign exchange authorities continued to warn of
intervention.
Finance Minister Yoo Il-ho said recent movements in the
dollar-won exchange rate warrant close observation by the
government and officials are ready to step in if movements
become too exaggerated.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0600 GMT
Currency Latest bid Previous day Pct Move
Japan yen 113.87 114.10 +0.20
Sing dlr 1.4025 1.4031 +0.04
Taiwan dlr 33.266 33.505 +0.72
Korean won 1226.34 1227.10 +0.06
Baht 35.55 35.61 +0.17
Peso 47.55 47.67 +0.26
Rupiah 13457.00 13505.00 +0.36
Rupee 68.48 68.47 -0.01
Ringgit 4.1615 4.2170 +1.33
Yuan 6.5174 6.5290 +0.18
Change so far in 2016
Currency Latest bid End prev year Pct Move
Japan yen 113.87 120.30 +5.65
Sing dlr 1.4025 1.4177 +1.08
Taiwan dlr 33.266 33.066 -0.60
Korean won 1226.34 1172.50 -4.39
Baht 35.55 36.00 +1.27
Peso 47.55 47.06 -1.02
Rupiah 13457.00 13785.00 +2.44
Rupee 68.48 66.15 -3.40
Ringgit 4.1615 4.2935 +3.17
Yuan 6.5174 6.4936 -0.37
(Additional reporting by Yena Park in SEOUL; Editing by Kim
Coghill)
