Emerging Asian currencies may face more corrections ahead after worries about high oil prices on Monday caused investors to trim positions in the regional units against the dollar and the euro. "Market is getting more concerned over oil prices. If Brent breaks through $130, that will dampen overall risk assets including Asian currencies," said Jeong My-young, a currency strategist at Samsung Futures in Seoul.
Bond outflows boosted dollar/rupiah to above the top of the daily Ichimoku cloud at around 9,070. The pair has been supported by outflows from Indonesia's stock and bond markets. The country's 10-year bond yield has been spiking up on worries about inflation. Removal of fuel subsidies could trigger higher inflation, which in turn could prompt policy reversals by the central bank.
Offshore players could shift portfolio flows to markets seen as providing more upside, such as Thailand, analysts said. Dollar/won rose on demand from South Korean importers. Offshore players including hedge funds actively bought the pair, dealers said. Local exporters took the gains as chances to sell for month-end settlements, especially around 1,130, but the pair may rise further with offshore names' demand, dealers said.
Dollar/Philippine peso rose above resistance around 43 as investors covered short positions, and dealers said more short-covering may lift the pair further. The pair gained to as high as 43.110, breaking through resistance at 43.016, the 38.2 percent Fibonacci retracement of its December-February slide.
It may rise to 43.200, which will be above its 200-day moving average at 43.137, as the market is still in a short-dollar position, a European bank dealer said. The next resistance levels are 43.306, the 55-day moving average, and 43.33, which is the 50 percent retracement and may be hard to breach. Dollar/baht rose on short-covering as the pair faced a firm support at 30.20, the 76.4 percent retracement of July-January rises.
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