The Malaysian ringgit and Philippine peso hit their highest levels in almost 16 months on Monday as the dollar faltered and Chinese data raised hopes of yuan gains, while Indonesia's central bank intervened to slow the rise in the rupiah. Asian stocks hit a 17-month high as a strong rebound in China's exports raised optimism about the region's economic outlook, while the dollar suffered its biggest fall in six weeks in the wake of disappointing US jobs data.
One-month dollar/ringgit non-deliverable forwards slid to 3.3320, the lowest since August 2008 and largely at par with the spot, as offshore investors scrambled to shed long dollar positions. "The market was caught long (on USD) from last Friday," said a Singapore-based dealer. The spot ringgit jumped as much as 1.3 percent to 3.3325, breaking key resistance at 3.35. "Investors are squaring their cross/ringgit positions and so far we see only hedging flows on cross/ringgit here," said a trader in Kuala Lumpur.
The peso gained 0.7 percent at 45.48, its highest in nearly 16 months. "The peso is gaining ground on the strong Chinese trade data. It's likely that successive positive data should have China moving towards strengthening the yuan, and the regionals should follow," said a dealer in Manila.
Traders say the peso was being driven more by fund inflows by institutions as the wave of remittance inflows seen in December has passed. One-month dollar/peso NDFs fell from Friday's close of 45.78 to 45.65, lowst since August 2008. Despite suspected intervention by the central bank, the high-yielding rupiah jumped 1 percent to 9,120 per dollar.
"BI (the central bank) does not want the rupiah to move too fast," said a trader in Jakarta. The currency has gained 3.3 percent against the dollar so far this month, making it the second best performer among the nine regional currencies tracked by Reuters. Meanwhile, Indonesian bond yields dropped on falling dollar/rupiah and upbeat comments by PIMCO, the world's biggest fund manager.
Chia-Liang Lian, a fund manager at Pacific investment Management Co, said Indonesian local debt was attractive due to its yield appeal versus other markets. The benchmark offshore one-year NDFs fell sharply to a two-month low, implying more yuan appreciation in 12 months after China posted strong foreign trade data over the weekend.
The NDFs hit 6.585, down from Friday's close of 6.607, its lowest level since November 13. Twelve-month yuan appreciation implied by NDFs rose to 3.70 percent measured from the Chinese central bank's daily mid-point, compared with 3.34 percent implied at Friday's close.
Expectations that Beijing may unshackle the yuan from a dollar peg gained steam after China's data showed exports leapt 17.7 percent from a year earlier, dwarfing the 4.0 percent rise forecast by economists and breaking a 13-month streak of year-on-year declines.
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