The Philippine peso hit a 3-1/2-year peak on Friday but the Singapore dollar retreated from its strongest level in more than seven years and other Asian currencies pared gains in line with moves in the yen.
The peso rose to 51.13 per dollar, taking its gains from Monday's low to more than 2 percent.
It dipped on initial reports of blasts in a Manila shopping area but soon rallied after President Gloria Macapagal Arroyo lifted the emergency rule imposed last week.
The Singapore dollar traded as high as 1.6127 per US dollar overnight, a level last seen in October 1998, towards the end of the Asian financial crisis, but it fell to 1.6190/6200, a shade weaker than where it had ended local trading on Thursday.
The Thai baht hit a one-year high of 38.54 per dollar, but some analysts worried that markets may have got a little carried away, given the political risk associated with the snap election called by Prime Minister Thaksin Shinawatra for April.
Some traders said the moves in the Sing dollar and baht were connected, influenced by investment flows related to the sale by Thaksin's relatives of their controlling stake in telecoms firm Shin Corp, a development that fuelled a campaign to oust him.
Traders suspected several minority shareholders had taken up an offer from Singapore's Temasek Holdings, which bought the controlling stake, to buy their shares, which explained the heavy foreign currency flows into Thailand.
"That was the second half of the transaction," one Singapore-based trader said, referring to the Sing dollar's drop.
The Indonesian rupiah retained its firm tone but held below one-year peaks struck this week. The Taiwan dollar retreated from a one-month high of 32.20 per US dollar.
The regional currencies have rallied strongly despite political trouble in some countries and analysts said some markets may not be pricing in risk adequately.
"There's often this complacency in Thailand, Indonesia and the Philippines because these political issues happen so often and their leaders are under threat all the time," said Lim Su Sian, an economist at Bank of Tokyo-Mitsubishi.
Lim said she would watch developments at the weekend in Thailand. Thaksin has a huge rally planned for Friday and the opposition plans to hold one on Sunday.
That prospect is underpinning other regional currencies.
"There is still one catalyst out there for Asian currencies and that is that in the coming weeks we are probably going to see more appreciation pressure on the Chinese yuan," said Jan Lambregts, head of Asia-Pacific research at Rabobank.
Comments
Comments are closed.