The euro recovered from an over two-year trough versus the Aussie amid signs that China is stepping up efforts to fend off economic overheating, prompting investors to cut risky positions in growth-linked currencies.
PESO The peso firmed in spot and offshore forwards against the weaker dollar as global stock markets stabilised and worries over Greece's fiscal woes eased. The spot peso gains a quarter of a percent to 45.78 per dollar. "The peso is stronger this morning on the overall weakness of the dollar, and once again we're seeing inflows from institutional guys shorting the dollar," said a Manila-based dealer.
One-month dollar/peso NDFs fell to 45.91 from Monday's close of 45.95, while 1-month onshore forwards inched up to 45.98, with onshore/offshore spread holding stead at just 7 points. The spread has fallen from as wide as 85 points earlier this month, reducing scope for arbitrage activity.
RINGGIT The ringgit gained 0.3 percent to 3.33 per dollar as risk appetite improved but investors wasted little time to buy back dollars on dips on fear that it may bounce back against major currencies such as euro and Aussie. Dollar drifted lower broadly as equity markets stabilise and concerns over Greece's fiscal woes ease.
"We see good bid below 3.3310/30 area but it still looks heavy though," said a trader in Kuala Lumpur. "I think the market is short on USD and they don't like to see majors going soft." On the chart, ringgit has attempted in vain to pierce the 3.33 resistance level in the past week. Meanwhile, one-month dollar/ringgit NDFs fell from Monday's close of 3.341 to 3.338, implying a 0.2 percent ringgit fall from the spot.
BAHT The Thai baht firmed to a 19-month high of 32.73 per dollar in sluggish trade, prompting fresh central bank intervention to slow a rise that is expected to continue in weeks ahead. "We saw early dollar selling this morning until the Bank of Thailand stepped in to stop it at 32.80. Its gain is broadly tracking regionals and if the baht could break this level, it may test the next major dollar support of 32.50 later," a Bangkok-based dealer said. The Thai baht has gained 1.6 percent against the dollar this month, trailing the rise of nearly 3.4 percent in the South Korean won and 2.6 percent in Malaysian ringgit.