SINGAPORE: Most emerging Asian currencies rose on Thursday as rebounds in battered oil prices improved risk appetite, while a lack of conviction on a long-term crude recovery amid worries about a slowing global economy limited gains in regional units.
Hong Kong's dollar rebounded from an over eight-year low hit on Wednesday as traders cut pessimistic bets amid strength in regional peers.
The Malaysian ringgit gained as the bounce in the crude eased concerns over the country's falling oil and gas revenue.
Foreign investors bought Indonesia's rupiah and South Korea's won.
Still, few analysts and traders expect emerging Asian currencies to extend gains for a long term as oil prices are seen staying under pressure from over supply with a global economy, especially China, staying sluggish.
"This is because global demand is typically the key driver behind oil prices, with increased demand also an important contributing factor. The slowdown in global growth is also continuing to result in weak exports from Asia," ANZ said in its monthly FX outlook report.
"Given the headwinds of weak regional fundamentals and concerns over China, global capital flows will likely remain highly volatile with the risk tilted toward more outflows from Asia."
ANZ revised its forecasts for China's yuan, the ringgit, India's rupee and the Hong Kong dollar weaker.
RINGGIT
Spot ringgit followed its strength in non-deliverable forwards (NDFs) on the rebound in oil prices.
The ringgit closely tracks crude prices as Malaysia is a major supplier of palm oil and natural liquefied gas.
The government bond prices also gained.
Malaysia's central bank is expected to hold interest rates steady later in the day as it looks to contain market jitters at a time plunging oil prices hit the country's economy and currency.
WON
The won gained as much as 0.6 percent to 1,206.3 per dollar as offshore funds unwound bearish bets in the South Korean currency so far this year.
Still, traders doubted over further appreciation in the worst performing Asian currency so far this year as foreign investors continued to sell local stocks.
"We could expect a real rebound only with a break of 1,200 level," said a currency trader at a South Korean stock brokerage in Seoul.
"Given tough situations in equity markets, it still looks better not to urgently sell dollars."
RUPIAH
The rupiah rose as foreign banks bought the currency with most of government's bond prices higher.
The Indonesian unit also strengthened in NDFs market.
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