Most Asian currencies ease on year-end

Most Asian currencies fell on Tuesday, as the US dollar gained on year-end corporate buying and general optimism the US economy may be poised for better growth in 2010. The Philippine peso led the Asian FX losses shedding 0.39 percent from late Monday while the Malaysian ringgit dipped 0.22 percent. The yen eased nearly 0.10 percent to 91.70 per dollar on expectations the Federal Reserve would probably act faster than the Bank of Japan to exit from its quantitative easing.
PESO Philippine peso eased 0.3 percent to 46.46 per dollar as investors covered short dollar positions after peso's recent gains. "We see a bit of short covering going this morning, the last minute demand perhaps from corporates," said a Manila-based dealer.
Most traders expected peso to pick up its uptrend, probably testing 46.20 near term due to remittance inflows towards the year-end. "I still prefer shorting dollar/peso short term. Over the long weekend there will be possible inflows that may help strengthen the peso," a second trader said.
Offshore forwards markets remained quiet as most market players stayed on sidelines. One-month dollar/peso NDFs edged up to 46.57, implying a 0.3 percent peso fall from the spot. The spread between 1-month NDFs and onshore forwards held steady at 22 points.
RINGGIT Malaysian ringgit fell nearly a quarter percentage point to around 3.4350 per dollar in thin late morning trade, weighed down by dollar buying by corporate investors to square year-end positions. "Corporate buying keeps dollar/ringgit in the 3.4290-3.4365 range so far," a Kuala Lumpur-based trader said.
Dealers said any further ringgit setbacks would find resistance at 3.4420-3.4450. "The sluggish 4.0 percent growth forecast for 2010 Malaysian GDP is immaterial, having little impact on the ringgit," one dealer said. Asia's third-most trade-dependent economy may grow four percent in 2010, helped by government spending, Malaysian Institute of Economic Research said on Tuesday.
BAHT Thai baht rebounded to around 33.35 per dollar from early morning fall to a near-seven-week low of 33.42 and against 33.38 late on Monday. "It's rather choppy. Early corporate buying of the dollar for year-end book-closing took the baht down to 33.42 before foreign profit-taking came in to take it to 33.35-37," a Bangkok-based dealer said. "After New Year, the baht may recover to 33.20 in January but should not breach that resistance," he said.