Asian currencies up

Asian currencies rose on Wednesday as investors snapped up regional stocks on hopes that Citigroup will return to profit in the first quarter, with the South Korean leading the pack and hitting a three-week high. The won jumped more than 3 percent to 1,461.9 per dollar - its highest since February 18 - helped also by remarks by the economy minister that the countrys exports would return to annual growth in the second half of this year.
The wons risk reversals, an options market gauge of interest in a currency, was quoted at 0.25/2.25 percent favouring dollar calls, the lowest in a year, as sentiment in the options market swings in favour of the won. "The market was too long dollars and speculators were buying downside protection," said Conrad Kwok, head of options desk at DBS Bank.
The won is still down 15 percent against the dollar so far this year amid concerns about the global economic outlook and doubts over the countrys ability to roll over mounting short-term foreign debt. Asian stocks rallied, with the MSCI index of Asia-Pacific stocks outside Japan rising 2.4 percent, buoyed by Wall Street gains after Citigroup Inc said it was profitable in the first two months of 2009 raising hopes for its first quarterly profit since the third quarter of 2007.
The Indonesian rupiah gained 1 percent to 11,825 per dollar, while six-month offshore dollar/rupiah non-deliverable forwards hit a one-month low at 12,600, implying a fall of 6 percent from the spot. The Philippine peso gained about 0.5 percent to 48.09 per dollar, a two-week high. "The peso is appreciating as expected as we saw a huge rally in the equity market overnight," says a Manila-based trader. Meanwhile, the Thai baht edged up 0.3 percent to 35.88 per dollar, capped by a suspected central bank baht-selling intervention.
"The Bank of Thailand is suspected of supporting the dollar/baht spot," said a trader in Singapore. A trader in Bangkok reckoned that the central bank may want to help struggling exporters by preventing the baht from rising too fast. But some investors said the regional bounce could be a dollar buying opportunity.
"Pullbacks in dollar/Asia may have further to run, but we are in no-way dissuaded from targeting consolidation or retrace as opportunities to establish or add to long dollar/Asia positions," said Patrick Bennett, a strategist at Societe Generale.
"Our favoured positions are long US dollar/Malaysian ringgit and US dollar/Singapore dollar," he said a note. The Singapore dollar and ringgit turned lower as the two countries high reliance on exports makes them more exposed to the global downturn than some of their regional peers. The Singapore dollar pulled back to 1.5413 per US dollar after hitting a two-week high at 1.5324 earlier in the session, while the ringgit eased to 3.698 per dollar from 3.675.