The Philippine peso rose on Wednesday as investors bought local stocks while the Bank of Thailand was seen again trying to halt the baht's appreciation. The yen pulled back from a 15-year high against the dollar and a nine-year peak on the euro on due to chances that Japanese authorities may take steps such as yen-selling intervention to stem the yen's rise.
Sean Callow, strategist at Westpac, said any yen intervention may have limited impact on emerging Asian currencies. The Philippine peso gained 0.6 percent to 45.25 per dollar in tandem with local stocks, rebounding after a knee-jerk reaction to the deadly bus hijack incident in Manila on Monday.
Investors expect the peso, a laggard in the region with a 2 percent gain against the dollar so far this year, to rise at a faster clip toward year-end as remittance inflows pick up. One-month dollar/peso non-deliverable forwards fell to 45.38 from 45.67 late on Tuesday, while one-month onshore forwards eased to 45.40 from 45.467.
The onshore/NDF spread reversed to 20 points from minus 203 points the previous day. The won shed 0.6 percent to 1,198.2 per dollar, the lowest since August 16, but it later cut losses as investors cleared dollar-long positions on expectations of exporters' demand for end-month settlements. The won is getting support at 1,200. The won has fallen about 2.6 percent so far this year, the worst performing currency in Asia.
Still, many expect the won to remain weak in the near-term on worries about a slowing global economic recovery. The Thai baht gained slightly to 31.50 per dollar but later steadied as dealers spotted central bank intervention. "The baht is being tugged by continued capital inflows and dollar-selling exporters on one side and dollar bidding by the central bank on the other," said a Bangkok-based dealer. The Bank of Thailand is expected to raise interest rates by 25 basis points rise later in the day.
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