Asian currencies fall

Asian currencies fell on Friday, pulling back from Thursday's multi-month highs versus the dollar, on a growing view that US interest rates may be on hold for a while despite a softening in the Federal Reserve's stance.
The Fed this week left rates steady and removed a reference to possible further interest rate rises in its policy statement. This had boosted hopes in the market for a near-term cut in rates, sending the dollar lower across the board.
But although Asian currencies were softer as the market reassessed its Fed view, sentiment remained positive given signs of a rebound in risk appetite.
"Markets should consolidate in the near term and the fundamental story hasn't changed," said HSBC currency strategist Richard Yetsenga. "Asian currencies should continue to appreciate and the Sing dollar, Malaysian ringgit, Indian rupee and Philippine peso have all been doing well despite the recent volatility."
Optimism about Singapore's economy and talk that the central bank could tighten monetary policy at its next meeting, expected next month, has bolstered the Singapore dollar. Malaysia's ringgit has drawn support from efforts to encourage foreign investment.
The Singapore dollar fell as far as 1.5200 per US dollar, about 0.25 percent off a 9-1/2 year high set on Thursday. South Korea's won traded at about 937 per dollar, close to the previous day's one-month peak around 936, and the Malaysian ringgit pulled away from Thursday's nine-year high around 3.4560 per dollar to trade at about 3.4635.
In onshore trade, the Thai baht fell as low as 35.06 per dollar, down about 1.25 percent from more than nine-year highs hit Thursday. Analysts said the sharp move was due to an unwinding of short positions in the dollar. Thailand's government met on Friday to discuss the impact of the rise of the baht on the economy and would find ways to help businesses, Prime Minister Surayud Chulanont said.
Some analysts said they were watching the Chinese yuan, which has traded in a narrow range this week even though there has been speculation of a pick up in the pace of appreciation following an interest rate hike last weekend. "We are over due for some exciting price action on China," said Sean Callow, a currency strategist at Westpac Bank.
"We have seen just incremental lows set on dollar/yuan, which has not been keeping pace with the rest of the world." The yuan was a tad softer on Friday at about 7.7295 per dollar. In a sign that appetite for high-yielding currencies is recovering from this month's market volatility, the Philippine peso gained as much as 0.25 percent to 48.12 per dollar - outperforming other Asian currencies.
Global markets suffered earlier this month from worries about the US economic outlook. But in recent sessions, equities have stabilised, lending support to local currencies.
"We have seen strong demand for Philippine stocks and there is appetite for risk, so we will see more interest in the peso," said a dealer in Manila. Philippine shares rose to a three-week high on Thursday, but were slightly softer on Friday.
The trader said corporate demand for US dollars and central bank intervention had capped the peso's gains. "We have seen central bank bids for dollar/peso around the 48.12 level - if it wasn't for this we would have seen dollar/peso lower," he said.