SINGAPORE: Most emerging Asian currencies rose on Monday as the dollar retreated from a near 14-year high with sliding oil prices dragging US Treasury yields lower, while doubts remained over further appreciation in regional units.
China's yuan advanced as state-owned banks were seen selling the dollar in the onshore currency market, traders said. That came after a central bank vice governor said on Sunday that current conditions point to a stabilisation of the renminbi after its recent volatility.
The yuan's gains helped the Singapore dollar rebound to a near one-week high versus the greenback. The city-state's currency touched its strongest in at least 26 years against neighbouring Malaysia's ringgit.
South Korea's won led gains among regional peers, hitting a 1-1/2-week high on demand from exporters for month-end settlements with overseas sales in November seen rebounding.
The Taiwan dollar also reached its strongest level in more than a week and a half as foreign financial institutions bought the currency as local stocks rose.
The US dollar fell from last week's peak, the highest since March 2003, against a basket of six major currencies as recent gains were seen as excessive. The 10-year Treasury yield also declined further after hitting a 16-month peak last week.
Still, few expected the greenback and Treasury yields to retreat for very long. Investors continue to price in the possibility of the US Federal Reserve hiking interest rates more often in 2017 than initially anticipated. If the Trump administration adopted a policy of fiscal spending and protection of domestic industries it would boost US inflation.
"We are seeing profit-taking on technical signs that USD may be overbought. A deeper correction in the USD cannot be discounted when US data do not match the US growth and inflation optimism reflected in the markets," said Philip Wee, senior currency economist at DBS Bank in Singapore.
"But at the same time, markets are reluctant to reverse its longer term bullish USD/Asia bias."
SINGAPORE DOLLAR
The Singapore dollar advanced 0.5 percent to 1.4208 to the US dollar, its strongest since Nov. 22.
The city-state's currency found supports from strength in the yuan and the yen as traders and analysts believe them to be a part of the undisclosed currency basket used by the Monetary Authority of Singapore to manage monetary policy.
Against the ringgit, the Singapore dollar appreciated 0.7 percent to 3.1367, its strongest since May 1990, according to available Thomson Reuters' data.
The Malaysian currency failed to join regional gains as tumbling crude prices underscored concerns over the country's oil and gas revenues. Trading of the ringgit was thin.
Oil prices fell more than 1 percent, extending declines from last Friday, as doubts re-emerged over the ability of major producers to cut output at a planned meeting on Wednesday aimed at reining in global oversupply.
WON
The won rose as much as 0.8 percent to 1,168.4 per dollar, its strongest since Nov. 16.
South Korea's exports were forecast to rise 1.2 percent this month from a year earlier, a Reuters poll showed earlier.
Overseas sales have fallen every month of the past two years with the exception of August when they rose.
TAIWAN DOLLAR
The Taiwan dollar gained 0.5 percent to 31.780 per the US dollar, its strongest since Nov. 16.
The island's currency pared some earlier gains as importers bought the greenback around 31.800 for payments.
Exporters took a breather, looking for chances to buy the Taiwan dollar around 32.000, although the month-end is approaching.
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