Baht slides, won rises

ASIAN CURRENCIES ROUND-UP

Thailand's baht had the first two-day slide in a month after the central bank cut its key interest and announced more measures to curb its appreciation to near a decade high. Bonds gained.

The baht has risen 3.1 per cent this month in onshore trading, the best performer among 10 of the most-active Asian currencies, buoyed by inflows into Thai stocks. Finance Minister Chalongphob Sussangkarn yesterday said the government may allow exporters to keep their dollar earnings longer than the current two-week limit.

"We're seeing a slowing of dollar sales, with investors and exporters sitting on the fence,'' said Kobsidthi Silpachai, head of capital markets research at Kasikornbank in Bangkok. "It's very difficult to guess what the authorities will do. There could be some measures that would be a surprise.''

The baht fell 0.4 per cent to 33.49 a dollar in onshore trading as of 4:35 pm in Bangkok, according to data compiled by Bloomberg. In the offshore market, the currency weakened 0.1 per cent to 30.25. The currency extended losses after the Bank of Thailand cut its one-day bond repurchase rate for a fifth time this year, to 3.25 per cent from 3.5 per cent.

The central bank has also provided additional measures for the government's consideration to curb the currency's strength, Assistant Governor Suchada Kirakul told reporters in Bangkok. He didn't elaborate.

Won

The South Korean won rose, approaching the highest this year, on signs growth in Asia's third-largest economy is gathering pace.

The currency is the second-best performer in the region today as a report showed department store sales in June increased at the fastest pace in four months. The won has also risen 0.9 per cent this month as the central bank July 11 raised its 2007 economic growth forecast as exports surge and consumer spending rebounds.

"There's still a lot of interest to hold the won and the fundamental story there still looks solid,'' said Thio Chin Loo, senior foreign-exchange strategist at BNP Paribas in Singapore. "The recent department sales report looks bullish, especially at a time when the government is positive on the growth story.'' The won climbed 0.2 per cent to 916.10 a dollar at the 3 pm close of onshore trading, according to Seoul Money Brokerage Services. Onshore markets were shut yesterday for a holiday. It reached 915.60 on July 13, the strongest since December.

Peso

The Philippine peso dropped, snapping four days of gains, on speculation yesterday's rally to a seven-year high was excessive. The 14-day relative strength index against the dollar dropped to 32.9 yesterday, the lowest since June 5, when the currency slumped more than 1 per cent in the following two days. A level below 30 signals a reversal is likely. "The peso has appreciated too far in the past few days,'' said Rafael Algarra, treasurer at Security Bank Corp in Manila. Buyers may pause as "45 is a psychological level''. The currency declined 0.1 per cent to 45.285.

The Malaysian ringgit fell for a third day on speculation losses at hedge funds related to US subprime mortgages will keep global investors away from emerging-market assets. Losses reported by Bear Stearns hedge funds spurred safe-haven demand for US Treasuries.

"It's eroding enthusiasm and appetite for emerging markets, so it's not looking good for the currency here,'' said Pong Teng Siew, head of research at MIMB Investment Bank Bhd. in Kuala Lumpur. "The problem in the US is still worrisome.''

The ringgit weakened 0.2 per cent to 3.4515 against the US dollar. The Singapore dollar dropped 0.1 per cent to S$1.5178, the Taiwan dollar was little changed at NT$32.821 and the Vietnam dong was steady at 16,137, the weakest in 14 years.