The Indonesian rupiah fell in spot and offshore markets on Friday as investors covered their dollar positions due to lingering jitters over capital controls, which also pressured other Asian currencies. Sentiment was undermined by weaker Asian stocks as investors took profits on riskier assets after data showed a record one in seven US mortgages were in foreclosure or at least one payment past due in the third quarter, signalling a recovery in the US housing market will be tepid at best.
The yuan was flat at 6.8278 per dollar as the central bank set a stable reference rate, showing its resolve not to let the currency rise even as two US senators pushed for a probe on China's dollar peg.
RUPIAH The rupiah fell in spot and offshore forward markets as investors covered their short dollar positions, extending its losses from the previous session. One-month dollar/rupiah NDFs rose as far as 9,645, implying a 0.7 percent rupiah fall from the spot.
Talk about BI's possible move to restrict foreign ownership in one-month central bank debt, or SBI, had triggered some sell-off in the short-term debt, traders said. One-month NDF spreads stand at 60 points while three-month at 120 points. On the onshore market, the rupiah initially fell half of a percent to 9,575 per dollar but later rebounded to 9,470, up about 0.6 percent from Thursday's close, as investors deemed its sell-off in the past two day as excessive.
The rupiah has shed more than 1 percent in the past week against the dollar, but it remains the best performing currency in Asia with a gain of 16 percent so far this year.
PESO The peso shed half of a percent to 47.3 per dollar, but investors believed its weakness will be short-lived. "We see small risk aversion and profit taking, but the peso should resume rallies from next week to the year-end, helped by seasonal inflows of FX remittances," said a Manila-based trader.
A second dealer said: "We're seeing guys covering or taking profits on their short-dollar positions. Institutional investors are cashing in their recent gains." The peso has lost 0.8 percent in the past week.
BAHT The baht dipped in line with Asian peers to 33.21 per dollar. "Baht returns to around 33.20, a level the Bank of Thailand is comfortable with. The basic dollar bearish tone is still intact. Investors in Asian stocks turned cautious today ahead of the weekend," said a Bangkok-based trader. The baht has gained 0.30 percent in the past week.
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