* Ringgit up near 2 pct; liquidity thin
* Won advances on stop-loss dlr selling, exporters
* Rupiah gains on bond inflows
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, Feb 4 (Reuters) – Most emerging Asian currencies
rallied on Thursday as investors dumped dollar holdings against
the regional units after a top Federal Reserve official
increased expectations of slower U.S. interest rate hikes.
The Malaysian ringgit jumped nearly 2 percent in
thin trading as crude oil prices extended gains on the dollar’s
weakness and expectations of production cuts. That helped
ease concerns over the country’s falling oil and gas revenues.
South Korea’s won advanced as investors rushed to
cover bearish positions in the second worst-performing Asian
currency so far this year. Indonesia’s rupiah rose on
William Dudley, President of the Federal Reserve Bank of New
York, said on Wednesday that financial conditions had tightened
considerably in the weeks since the U.S. central bank raised
interest rates. Policy makers would have to take that factor
into consideration should it persist, he said.
Activity in U.S. services sector slowed in January to a near
two-year low, adding to doubts over the pace of future increases
in U.S. borrowing costs. The dollar on
Wednesday hit a three-month low against a six major currencies.
“Asia FX may receive some Chinese New Year respite. Markets
seem to be looking for an excuse to sell USD,” said Christopher
Wong, senior FX analyst for Maybank in Singapore.
“Together with easing… by other major central banks
including the BOJ and the ECB, accommodative monetary conditions
globally provide some temporary support for Asia ex-Japan FX.”
The ringgit and the rupiah could lead regional gains because
those currencies are more sensitive to oil prices and a weaker
dollar, Wong added.
Sentiment toward emerging Asian currencies has already
improved in the last two weeks as major central banks affirmed a
loose monetary policy stance, a Reuters poll found.
The Bank of Japan last week adopted minus interest rates,
while the European Central Bank is expected to take provide more
stimulus next month.
Still, traders and analysts, including Maybank’s Wong,
remained cautious ahead of U.S. economic data including non-farm
payrolls (NFP) due on Friday and the comments of other top Fed
Economists polled by Reuters are looking for total non-farm
payrolls to increase by 190,000 in January and the unemployment
rate to remain at a 7-1/2-year low of 5 percent.
“We would need below-consensus U.S. payrolls for the trend
to continue, something closer to 100,000,” said Sean Yokota,
head of Asia strategy for Scandinavian bank SEB in Singapore,
referring to the trend to a weaker dollar and stronger Asian
The ringgit found further support from demand linked to
Interbank speculators hesitated to add further bullish bets
on the Malaysian currency with caution growing ahead of U.S.
data and liquidity subdued.
“I will buy USD on dips. Tomorrow, we have NFP,” said a
senior Malaysian bank trader in Kuala Lumpur.
The won advanced as local and foreign investors dumped
dollar holdings to limit losses. South Korea’s exporters also
bought the won for settlements.
The South Korean currency pared some of earlier gains as
local importers purchased the dollar for payments on dips.
“We need to open the door for further stop-loss (dollar)
selling, but the dollar has found some support overall now,”
said a South Korean bank trader in Seoul. “The won is unlikely
to extend gains from here.”
The rupiah gained, tracking higher government bond prices
, which offer one of the highest yields in Asia.
Long-term foreign investors bought the Indonesian currency
in non-deliverable forwards markets, traders said.
The official Jakarta Interbank Spot Dollar Rate,
which the central bank introduced in 2013 to manage exchange
rate fluctuations, was fixed at 13,662, stronger than the
CURRENCIES VS U.S. DOLLAR
Change on the day at 0505 GMT
Currency Latest bid Previous day Pct Move
Japan yen 117.87 117.91 +0.03
Sing dlr 1.4151 1.4140 -0.08
Taiwan dlr 33.377 33.808 +1.29
Korean won 1202.30 1219.30 +1.41
Baht 35.62 35.82 +0.56
Peso 47.75 47.86 +0.24
Rupiah 13675.00 13750.00 +0.55
Rupee 67.85 68.07 +0.34
Ringgit 4.1520 4.2200 +1.64
Yuan 6.5778 6.5764 -0.02
Change so far in 2016
Currency Latest bid End prev year Pct Move
Japan yen 117.87 120.30 +2.06
Sing dlr 1.4151 1.4177 +0.18
Taiwan dlr 33.377 33.066 -0.93
Korean won 1202.30 1172.50 -2.48
Baht 35.62 36.00 +1.07
Peso 47.75 47.06 -1.43
Rupiah 13675.00 13785.00 +0.80
Rupee 67.85 66.15 -2.50
Ringgit 4.1520 4.2935 +3.41
Yuan 6.5778 6.4936 -1.28
(Additional reporting by Yena Park in SEOUL and IFR Markets’
Catherine Tan; Editing by Eric Meijer)