Taiwan dollar, baht up

The Taiwan dollar and the Thai baht rose on Friday helped by inflows into their stock markets while the Indonesian rupiah lost ground as the trade balance stayed in deficit in January and inflation hit a 20-month high last month. Foreign investors bought a net T$5.52 billion ($186.07 million) in stocks on Friday, pushing up the currency.
The baht also advanced on the back of foreign investors buying a net 3.82 billion baht ($128.40 million) worth of stocks on Thursday. Foreigners remained net sellers of stocks in February but the figure was brought down to 17.39 billion baht, Thomson Reuters data showed.
Foreigners also returned to net long on index futures for the first time in 8 days of 1,400 contracts with net buys of bonds for a 13th day worth 8.29 billion baht, Maybank Kim Eng Securities said in a note. The baht is expected to stay firm on strong economic fundamentals, but some analysts doubt whether the Thai currency can appreciate from here, given its outperformance and expectations of slower inflows.
"The baht will stabilise. Exports continue to recover which is supportive, however the expected slowdown in re-construction flows will be counteracting," said Frances Cheung, senior strategist at Credit Agricole CIB in Hong Kong. The baht was the best performing emerging Asian currency with a 3.0 percent appreciation so far this year, according to Thomson Reuters data.
The Taiwan dollar gained on stock inflows and demand from some exporters. But US dollar bids by importers including oil companies limited the island's currency, especially around 29.600 to the greenback. Traders said some state-run companies bought the US dollar around that level, indicating the central bank may want the Taiwan dollar to stay weak.
The rupiah fell as higher-than-expected February inflation data raised concerns over an increase in the general level of prices and prompted foreign banks to take profits from its recent gains. "Dollar/rupiah will stay in a 9,650-9,700 range for the short term," said the trader, adding he would short the pair around 9,710.
Incoming funds to Indonesia's stocks and bonds helped the rupiah rise 0.3 percent against the dollar in February, its largest monthly percentage appreciation since January 2012, according to Thomson Reuters data. The ringgit fell as interbank speculators cut long positions in the Malaysian currency before a weekend on sustained caution over the upcoming election, which must be called by end of April.
Offshore macro funds also sold the ringgit, traders said. "Nobody wants to hold dollar-short positions, in case of an announcement of election," said a Malaysian bank dealer in Kuala Lumpur. On Thursday, the ringgit rose 0.3 percent on short-covering amid improving risk appetite.