Baht at 10-year high

Most Asian currencies gained against the dollar on Monday as funds flowed into the region's stock markets, with the Thai baht hitting another 10-year high. The baht firmed as far as 33.85 per dollar in the domestic market, up about 0.5 percent from late Asian trade on Friday. The currency has risen nearly 1.9 percent over the past week.
"Exporters are still selling the dollar as in panic after it broke the 34 level and capital is flowing into the stock market as well," said a trader in Bangkok. The Bank of Thailand said on Monday it would relax foreign exchange rules for some foreign investors for a month starting on July 16, in a move seen boosting demand for baht onshore.
The Malaysian ringgit rose as far as 3.44 per dollar, up almost a third of a percent from late Asian trade on Friday as most Asian currencies strengthened in step with the region's stock markets.
The MSCI's measure of Asia Pacific stocks excluding Japan rose 1.5 percent. Analysts generally remain bullish about the upside of most Asian currencies, citing the region's solid economic fundamentals and signs officials are less concerned about currency appreciation as in the past. "Prevailing risk appetite will eventually translate into appreciation in the Asian high yielders," said Christy Tan, currency strategist at Bank of Amercia.
The high-yielding Philippine peso however, was little changed near 46 per dollar, while the Indonesian rupiah also made little headway, indicating the lingering caution after a sell-off last month.
Chin Loo Thio, currency strategist at BNP Paribas, said she favoured the Indian rupee peso and ringgit. "The Singapore dollar is a good defensive play," she said. The Taiwan dollar jumped 0.44 percent in late trade to 32.666 per dollar after suspected central bank selling of the US dollar to help support the local unit, dealers said.
"It sold off the spot from 32.810 to 32.666," said a trader. The Chinese yuan moved in a thin range between 7.6045 and 7.6021 per dollar. The yuan has been retreating after hitting a post-revaluation high of 7.5929 per dollar on July 3, but analysts believe the trend of gradual appreciation in the currency remains intact.
Investors are waiting for Chinese data starting this week, including the trade surplus and money supply. China's trade surplus is likely to swell to a record high of $24.0 billion in June due to stronger exports, according to the median forecast of 14 economists polled by Reuters.
"The combined effect from rising liquidity and political tensions related to a ballooning trade surplus is expected to result in a renewed acceleration of yuan appreciation," J.P. Morgan analysts said in a research report.