Asian Currencies: Thai Baht, Ringgit Lead Advance; Won Declines

By David Yong and Shanthy Nambiar

Aug. 13 (Bloomberg) -- Thailand's baht led gains in Asian currencies, rising the most in almost three months, on speculation exporters were converting their overseas earnings as a rally in the U.S. dollar ended.

The baht halted a three-day slide as it climbed from the lowest since December. Export growth may exceed the government's 15 percent forecast this year due to demand from emerging markets, Commerce Minister Chaiya Sasomsup said Aug. 6. Malaysia's ringgit and Taiwan's dollar halted a slump as technical charts suggested losses this month were overdone and on optimism Asian central banks will support their currencies.

``We are seeing exporters buying baht,'' said Chatchawan Jumruswittayawong, a currency trader at Bank of Ayudhya Pcl in Bangkok. ``The baht is following regional currencies higher and the Bank of Thailand is also trying to stabilize the baht.''

Thailand's currency rose 0.6 percent to 33.66 per dollar as of 3:21 p.m. in Bangkok, the biggest gain since May 20, according to data compiled by Bloomberg. The ringgit strengthened 0.2 percent to 3.3175 and Taiwan's dollar advanced 0.1 percent to NT$31.150.

Seven of 10 most-traded currencies in Asia outside Japan gained, including the Singapore dollar and Indonesian rupiah. South Korea's won fell to a five-week low and Vietnam's dong made the biggest one-day loss since June 27.

`Overdone'

The ringgit ended an eight-day losing streak, its longest since its peg to the dollar was scrapped in July 2005, as the U.S. dollar declined after JPMorgan Chase & Co. yesterday reported a $1.5 billion writedown in mortgage-backed securities, suggesting the U.S. credit crisis may worsen.

``The ringgit's decline is overdone and not justified given its fundamental outlook,'' said Yeah Kim Leng, chief economist in Kuala Lumpur at RAM Holdings Bhd., the nation's biggest rating company. ``The subprime issue will linger in the U.S. and Asia's economies are still going to hold up quite well.''

The dollar-ringgit's 14-day relative strength index, a comparison of the magnitude of gains and losses, reached more than 70 today, according to data compiled by Bloomberg. A level below 30 or above 70 signals a reversal may occur.

Taiwan's dollar snapped its longest losing streak since December 2001 as traders speculated the central bank will intervene to slow its decline since July 28. The local currency's RSI also suggested it was oversold.

Intervention

``Central banks do have the interest in reducing the more extreme foreign-exchange volatility, especially when it contributes to inflation,'' said Daniel Hui, a currency strategist at HSBC Holdings Plc in Hong Kong. ``More recently, we might have seen a less vigorous action to slow the currency weakness as inflation concerns have eased.''

Taiwan last week reported a trade deficit for July, the first since February 2006, as export growth fell to 8 percent from 21.3 percent the previous month. The Central Bank of the Republic of China (Taiwan) has increased borrowing costs 16 times since September 2004 to temper inflation.

Bank Negara Malaysia sold $4 billion of the U.S. currency in June, including forward contracts, while Taiwan's central bank was a net seller of U.S. dollars for a second month in July to temper the currency's slide, HSBC said yesterday in a report to clients.

Elsewhere, China's yuan gained 0.1 percent to 6.8597 per dollar, Singapore's dollar climbed 0.4 percent to S$1.4053 and Indonesia's rupiah gained 0.1 percent to 9,177. South Korea's won fell 0.5 percent to 1,039.40 and the Philippine peso lost 0.2 percent to 44.717.

To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net; Shanthy Nambiar in Bangkok at snambiar1@bloomberg.net.