The Malaysian ringgit and Thai baht fell alongside most of their Asian peers on Friday as the dollar firmed broadly, with sentiment hurt by weaker regional stocks. The US dollar rallied broadly on short-covering after major central banks jointly announced steps to scale back massive injections of the US currency, raising fears.
RINGGIT The ringgit fell as much as 0.6 percent to 3.4830 against a broadly firmer dollar as Asian stocks fell. "Dollar/ringgit opened higher because the euro, sterling and Australian dollar were lower (against the US dollar)," said a trader in Kuala Lumpur.
"However dollar/ringgit has been unable to stay above 3.4800 and I don't think the market is ready to push it higher until we see signs from the rest of Asia," the trader added. Analysts have turned more bullish about the ringgit, which has lagged most Asian currencies in a recent rally.
The ringgit has gained 7 percent against the dollar since March as part of Asia-wide rally fanned by signs of the global economic recovery, but it has trailed behind the Singapore dollar, which has jumped 10 percent. "Going forward, a narrowing in the export and GDP gaps between the two countries should stimulate some catch-up in the ringgit," Han Sia Yeo, strategist at ANZ, said in a note. Investors should sell Singapore dollar/ringgit via six-month NDFs to capitalise on the prospects of the ringgit catching up with the Singapore dollar, he said.
BAHT The Thai baht fell as far as 33.69 per dollar, a day after it hit 33.45, the highest level since July 2008. "The baht is weaker in line with the broad market as the dollar firmed against most Asian currencies," said a trader in Bangkok.
The central bank had intervened by buying dollars in recent sessions in a bid to temper the baht's strength, which Thai officials believe could hurt local exporters, traders said. "The intervention was especially heavy when the baht was near the 33.50 level. The Bank of Thailand tried to prevent it from rising above that level," the trader said.