SINGAPORE: Emerging Asian currencies were mixed on Wednesday with the South Korean won pressured by profit-taking on worries about Greece's ability to restructure its debt, while the Thai baht broke through a resistance line helped by inflows.
The regional units rose against the yen with the Malaysian ringgit and the Taiwan dollar hitting their highest versus the Japanese currency since August. The yen has been weak against other major currencies since the Bank of Japan's surprise monetary easing last week.
Early Wednesday, most emerging Asian currencies slid against the dollar as investors covered short positions in the US dollars on renewed concerns over Greece and on higher oil prices.
Even if the new Greek aid package eased fears of an immediate default, its economic outlook remained anything but rosy, a problem that could yet derail its efforts to meet comply with tough austerity steps.
Geopolitical tensions in the Middle East surrounding Iran's nuclear activities are expected to support oil prices, which hit a nine-month high on Tuesday, forcing Asian oil importers to pay higher bills.
However, investors looked to buy the emerging Asian units on dips, limiting losses on views that inflows to the region will help the currencies weather the sustained caution over the euro zone's debt problems, dealers and analysts said.
"I don't see extreme downside pressure on emerging Asian currencies currently," said Sacha Tihanyi, senior currency strategist for Scotia Capital in Hong Kong.
"I see consolidation as the logical evolution from here, at least until we see a large-scale macro event shake them out of their ranges," Tihanyi said, adding the recent strong US economic data are likely to support emerging Asian currencies.
They have gained this year on ample liquidity after policy moves by major central banks and by periods of signs that the Greek debt problems were easing.
But the many of the regional units saw some profit-taking after the euro zone's finance ministers approved a second rescue fund for the debt-ridden country on Tuesday.
Emerging Asian currencies didn't react to a private survey on Wednesday showing China's manufacturing sector contracted for the fourth consecutive month as new export orders fell.
A sluggish global economy usually puts pressure on the regional units as Asia relies heavily on exports, but the recent slowdown has raised hopes for more policy easing, especially in the bigger economies, dealers and analysts said.
WON
Dollar/won rose on short-covering, but exporters' supplies capped its rises.
Foreign investors also continued to buy Seoul stocks, extending their buying spree to a fourth consecutive session.
"I don't think it could rise much more from here. It is stuck in a range," said a foreign bank dealer in Seoul.
BAHT
Dollar/baht fell below a 200-day moving average support level for the first time since mid-September, on inflows to Thai stocks and bonds.
Some traders said the break of the average at 30.672 prompted stop-loss dollar sales.
Real money investors also show interested in selling the pair, while some dealers said sales of yen/baht put pressure on dollar/baht. Yen/baht hit its lowest level since early August.
If dollar/baht ends the day lower than the moving average, it may head to 30.530-30.470.
The pair has support at the 61.8 percent Fibonacci retracement of its July-January rise at 30.530. The 30.470 is the October-low where rallies to 31.920 started.
Foreign investors were net buyers in Thai stock market during the previous six consecutive sessions.
PHILIPPINE PESO
Dollar/Philippine peso rose on short-covering. Macro accounts also covered short positions in offshore non-deliverable forwards (NDFs).
But the pair gave up much of its earlier gains as leveraged names sold it and interbank speculators joined the move when dollar/peso failed to stay above 42.80.
A European bank dealer in Manila said he doesn't see a reason to avoid risk, despite worries over Greece and high oil prices.
RINGGIT
Dollar/ringgit started the day higher on short-covering, but most of the rise was erased when Malaysian exporters sold the pair.
"Exporters are scared of a falling dollar. So they will sell their dollar proceeds whenever they have chances," said a Kuala Lumpur-based dealer.
Given those exporters' supplies, it is difficult to carry dollar holdings, the dealer added.
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