SINGAPORE, Aug 2: The Indian rupee fell on Friday, leading slides among emerging Asian currencies even as the central bank imposed stabilisation measures, on caution before a key U.S. jobs data for clues on when the Federal Reserve would start cutting stimulus.
The rupee slid 0.5 percent although the Reserve Bank of India on Thursday tightened hedging rules for foreign institutional investors in the currency market.
The rupee, along with the Malaysian ringgit, the Thai baht and Philippine peso came under pressure from a slew of upbeat U.S. Economic data on Thursday, including a drop in weekly jobless claims.
A solid recovery in the world’s top economy supported Asian stocks, but weighed on currencies due to growing views that the Fed may soon start scaling back its massive bond-buying programme of $85 billion a month.
‘Asian FX may continue to get the short end of the stick, with the stronger dollar dynamic dominating over any positive vibes from equities,’ said Emmanuel Ng, a foreign exchange strategist for OCBC Bank in Singapore.
Investors are awaiting July U.S. Jobs data due later in the day as the U.S. Central bank has said a recovery in the jobs market would be key to any decision on tapering.
The government is expected to report nonfarm payrolls increased 184,000 last month after rising 195,000 in June, according to a Reuters survey of economists.
However, there is a risk payrolls could surprise on the upside after a report on Wednesday showed U.S. Private employers maintained a high pace of hiring in July.
For the week, most emerging Asian currencies were already set to suffer from depreciations.
The rupee was the worst performing regional unit with a 2.8 percent fall against the dollar so far this week. If it maintains the fall, that would be the largest weekly loss since the week ended June 21, according to Thomson Reuters data.
The ringgit has lost 1.3 percent amid bond outflows, which would be the biggest weekly loss since the same period, the data showed.
Short positions in the Malaysian currency hit a 4-1/2-year high during the last two weeks, with more bearish sentiment on most emerging Asian currencies, a Reuters poll showed on Thursday.
The South Korean won has declined 1.2 percent. Both the Singapore dollar and the Thai baht have lost 0.8 percent.
The Philippine peso has fallen 0.6 percent, while the Taiwan dollar has eased 0.1 percent. The Indonesian rupiah has also dipped 0.2 percent.
BAHT
The baht slid as much as 0.4 percent to 31.42 per dollar, the weakest since July 9, on some stock and bond outflows.
Thai stocks lost more than 1 percent. Five-year bond yields rose to 3.78 percent, the highest since August 2011, while 10-year yields advanced 4 basis points to 4.03 percent.
But the Thai currency recouped some of its initial losses as investors covered short positions.
‘We are seeing some consolidation here first as some profit taking (from a firm dollar) sets in,’ said a Thai bank trader in Bangkok.
RINGGIT
The ringgit fell as much as 0.4 percent to 3.2550 per dollar, the weakest since July 1, 2010, in thin trading on broad strength in the greenback.
Five- and three-year Malaysia government bond yields and rose.
But the ringgit pared some of its initial losses as investors covered short positions before the weekend, regarding the currency as having been excessively sold.
The 14-day dollar/ringgit’s relative strength index (RSI) stood at 71.2. A reading above the 70 threshold indicates the dollar is overbought against the ringgit.
Some traders said the ringgit is unlikely to fall much unless the U.S. Nonfarm payrolls is far stronger than expected.
‘It is too high to buy the dollar here, unless the number is super good,’ said a senior Malaysian bank trader in Kuala Lumpur.
A 250,000 would be ‘super good,’ the trader added, referring to payrolls.
WON
The won eased on selling from some offshore funds before the U.S. Jobs data.
The South Korean currency recovered some losses on demand from exporters for settlements. Some other offshore funds also joined the bids, traders said.
‘I think the won has priced solid U.S. Jobs data in pretty much,’ said a senior foreign bank trader in Seoul.
Some investors appeared to have long dollar positions to clear and exporters would not miss a chance to buy the won around 1,130 to the greenback, the trader added.
PHILIPPINE PESO
The peso lost as much as 0.4 percent to 43.73 per dollar, the weakest since July 8, as investors covered dollar short positions and on dollar demand from local companies.
The Philippine currency found chart support around 43.75, the session low of July 8 and June 25, prompting some investors to take profits from the greenback’s strength.
Still, strong U.S. Jobs data is expected to put further pressure on the peso, traders said.
‘I am looking at above 200,000,’ a foreign bank trader in Manila said, referring to a July non-farm payrolls figure and adding the number will force the peso to weaken past 43.75 and head to 44.17.
‘As long as it is now below the consensus, the dollar will remain strong. Just degree of strength will differ,’ he added.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0405 GMT
Currency Latest bid Previous day Pct Move
Japan yen 99.30 99.55 +0.25
Sing dlr 1.2749 1.2765 +0.13
Taiwan dlr 29.990 30.125 +0.45
Korean won 1124.60 1123.50 -0.10
Baht 31.38 31.30 -0.25
Peso 43.59 43.56 -0.07
Rupiah 10280.00 10275.00 -0.05
Rupee 60.75 60.43 -0.53
Ringgit 3.2500 3.2425 -0.23
Yuan 6.1305 6.1305 -0.00
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 99.30 86.79 -12.60
Sing dlr 1.2749 1.2219 -4.16
Taiwan dlr 29.990 29.136 -2.85
Korean won 1124.60 1070.60 -4.80
Baht 31.38 30.61 -2.45
Peso 43.59 41.05 -5.83
Rupiah 10280.00 9630.00 -6.32
Rupee 60.75 54.99 -9.48
Ringgit 3.2500 3.0580 -5.91
Yuan 6.1305 6.2303 +1.63
(AGENCIES)
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