Most emerging Asian currencies fell on Thursday as investors took profits from recent gains after the European Central Bank's fresh liquidity injections and as Federal Reserve Chairman Ben Bernanke failed to provide clear signs of more policy easing. But the Singapore dollar bucked regional weakness, eking out a slight gain as investors bought the city-state's currency against a retreating euro.
"Asian currencies, along with the euro and the Australian dollar, have risen after the QE3 talks. Without QE3, we must give up some of those gains," said a senior dealer at a Malaysian bank in Kuala Lumpur. Dollar/baht rose as demand from domestic banks and gold importers prompted a short squeeze. Earlier, the pair's upside was capped by strong selling from offshore accounts and foreign banks in Bangkok.
Dollar/rupiah rose as an unexpected slowdown in inflation failed to ease worry about price pressure in Indonesia. Dollar/ringgit gained slightly on short-covering by interbank speculators, but they were reluctant to chase the pair higher on a view risk appetite may improve after a strong China PMI. "The market is still short and I will buy on dips around 2.9930-50 with stop-loss at 2.9900," said a Kuala Lumpur-based dealer.
US dollar/Singapore dollar started higher but it turned lower pressured by selling euro/Singapore dollar. Macro funds and interbank speculators sold US dollar/Singapore dollar, dealers said. Dollar/Philippine peso rose on a weaker euro in the afternoon, but investors hesitated to make big bets before the central bank's rate decision. The Bangko Sentral ng Pilipinas (BSP) was expected to cut its key policy rate for the second time in a row by 25 basis points to 4.00, a Reuters poll showed.