Most emerging Asian currencies rose on Friday to pare weekly losses as the dollar slid after soft US economic data and risk appetite improved on news of a ceasefire accord in Ukraine and hopes of an agreement on Greek debt problems. The South Korean won outperformed on exporters' demand before Lunar New Year holidays next week. Malaysia's ringgit gained as investors covered short positions.
India's rupee rose as retails inflation in January came within market expectations and stayed well below the central bank's target. The dollar slumped against a basket of six major currencies on disappointing US retail sales and weekly jobless claims. Emerging Asian stocks rose on news of a ceasefire in Ukraine and as a stand-off between Greece and its European creditors on the country's bailout programme eased slightly after the debt-burdened nation made an about-face on Thursday.
Still, the outlook for regional currencies stayed weak as risk sentiment remains fragile amid concerns over a slowing global economy, analysts said. "It is only following a softer USD overnight," said Andy Ji, Asian currency strategist for Commonwealth Bank of Australia in Singapore, referring to Friday's gains in emerging Asian units. "The economic data out of the US economy has been softer lately which adds the growing woes in the global economy and should temper risk sentiment," said Ji, adding regional units may weaken further led by the ringgit, Indonesian rupiah and the Indian rupee.
For the week, most emerging Asian currencies have already slid. The rupiah has lost 1.2 percent against the dollar so far this week, leading regional depreciation, Thomson Reuters data showed. The Indonesian currency on Thursday hit a near two-month low as foreign banks and offshore funds sold it ahead of the fourth-quarter current account data later on Friday.
The ringgit has slid 0.9 percent on concerns that sliding oil prices will bite into Malaysia's current account surplus and widen its fiscal deficit. The country reported a smaller current account surplus in the fourth quarter. The rupee has fallen 0.7 percent and the won has depreciated 0.6 percent. The Philippine peso has eased 0.2 percent, while and the Singapore dollar and the Thai baht have been off 0.1 percent each.
The won jumped for the day on stop-loss dollar selling as the greenback fell on weak US economic data. The South Korean unit rose further on exporters demand for settlements before the Lunar New Year holidays next week. Local financial markets will be closed from Wednesday to Friday. The won may rise further, given the yen's strength, traders said. The ringgit rose as a break of 3.5900 per dollar caused investors to scramble for the Malaysian currency to stop losses.
Government bond prices also rose. The Taiwan dollar gained as exporters bought it before the Lunar New Year holidays next week. Corporate demand usually increases before a long holidays to pay bonuses to employees. The island's currency found further support on expectations of further stock inflows. Foreign investors bought a combined net T$49.5 billion ($1.6 billion) worth of local stocks during the previous nine consecutive sessions, Taiwan Stock Exchange data showed. Until Thursday, foreigners were net buyers in the island's share market on all of the trading days this month.
original source: http://www.brecorder.com/money-a-banking/198/1151253/