The Philippine peso and the Thai baht recovered from early lows on Thursday in trading that was primarily driven by onshore markets as regional centres remained closed for a second day. With markets in Singapore and Hong Kong shut for the Lunar New Year holidays, and holidays elsewhere in South Korea, Taiwan, China, Indonesia and Malaysia, trading volumes were minimal. Bangkok-based traders said the baht retreated further from Monday's five-year highs on dollar buying by a local firm to meet debt payments.
It hit a month's low of 38.70 on Wednesday, but rallied to around 38.55 on Thursday. The baht rose to its highest in nearly five years this week on Prime Minister Thaksin Shinawatra's historic landslide victory in Sunday's general election.
"Dollar/baht saw some good bids yesterday and even this morning. But now some exporter selling has emerged," said one trader.
Some of the baht selling was driven by the dollar's ascent to two-month highs against the yen during a week-long rally spurred by Federal Reserve Chairman Alan Greenspan's comments that market forces and US budget discipline should help reduce the US current account deficit. Some of that bullishness had waned on Thursday ahead of US trade data.
Elsewhere, the peso was also volatile. It fell to a two-week low of 55.36 on Wednesday but had rallied to 54.70 on Thursday.
The peso hit 54.52 per dollar this week, its highest in over a year, on talk of foreign fund inflows for one of the country's mining projects.
Although it surrendered some of its recent gains to a rallying US dollar, the peso is emerging Asia's top performer so far in 2005.
Its nearly 3 percent gains in four weeks have been driven by several factors, including the passage of key tax reforms, the strong response to the Philippine's first sovereign bond issue in 2005 and foreign investment inflows.
Last week the government unveiled 23 priority mining projects into which it expects local and foreign mining firms to pump up to $6 billion over the next 6 years.
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