Thai protests weaken baht; rupiah leads Asia FX lower

26 Nov, 2013

The Thai baht weakened to its lowest against the dollar for nearly 11-weeks as anti-government demonstrators occupied the Finance Ministry on Monday. The Indonesian rupiah led falls among emerging Asia currencies, however, as it slipped to its weakest since March, 2009, due to nagging concern over its vulnerability to capital outflows.
In Thailand, more than 1,000 anti-government demonstrators occupied the finance ministry building, and protest leaders called on demonstrators to seize other government buildings in an escalating campaign to topple Prime Minister Yingluck Shinawatra.
The baht fell 0.4 percent to 31.97 per dollar, its weakest since September 11, as traders said both offshore funds and onshore investors sold the Thai currency as tensions mounted.
The Thai currency has room to weaken to 32.087, the 76.4 percent Fibonacci retracement of its September appreciation, analysts said.
Indonesia's rupiah, the worst performing Asian currency for the year so far, eased by as much as 0.5 percent to 11,745 per dollar, its weakest level in almost 4 1/2 years. Due to Indonesia's current account deficit, the rupiah is regarded as the Asian currency most vulnerable to capital outflows once the US Federal Reserve finally starts winding down a stimulus strategy that has fuelled dollar inflows to emerging markets.
The official Jakarta Interbank Spot Dollar Rate (JISDOR) , which the central bank introduced in May as part of a bid to manage exchange rate fluctuations, was set at 11,722 rupiah per dollar, the weakest rupiah level since JISDOR's introduction.
The Singapore dollar fell 0.3 percent to 1.2537 to the greenback, its weakest since October 10.
The city-state's currency found a chart support area near 1.2540, the 38.2 percent Fibonacci retracement of its August-October appreciation. It also has a 200-day moving average at 1.2536. The Singapore dollar has been closing stronger than the average since October 2. Malaysia's ringgit eased as far as 3.2270 per dollar, its weakest since October 2, slipping past a 100-day moving average at 3.2190.
The ringgit is expected to weaken to 3.2366, the 76.4 percent retracement of its appreciation between September 30 and October 28.
The won was flat at midday Monday as upward pressure on the currency from gains in local stocks was capped by caution that South Korea authorities might intervene to sell the won.
The won was quoted at 1,060.4 per dollar at 0310 GMT, almost unchanged from Friday's domestic close of 1,060.2.

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