EM ASIA FX-Asia FX takes breather before Fed outcome; rupiah lower
* FX markets largely subdued ahead of Fed outcome
* Foreign bond selling, corp dlr demand hit rupiah
* Ringgit down on post budget profit-booking
* Philippine peso weaker on dlr short-covering
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, Oct 29 (Reuters) - Emerging Asian currencies were
largely lower on Tuesday as investors booked profits before the
outcome of the U.S. Federal Reserve policy meeting this week,
with the Indonesian rupiah pulling back on selling of domestic
bonds by foreign banks.
Regional currencies found little support from a liquidity
injection by China's central bank -- the first such injection in
two weeks -- as it appeared insufficient to cover month-end cash
demand, some analysts said.
The rupiah underperformed on month-end dollar
demand from local corporates.
The Malaysian ringgit fell as some hedge funds
booked profits from its gains after the government's steps to
ease a fiscal gap. The Philippine peso weakened on
dollar bids from domestic companies.
The dollar edged higher but remained close to a
nine-month trough against a basket of currencies, with markets
widely expecting the Fed to maintain its monetary stimulus in a
two-day meeting starting later in the day.
Emerging Asian currencies have reflected such expectations
by rallying recently, traders and analysts said.
"The Fed policy is pretty much priced in," said Frances
Cheung, senior strategist at Credit Agricole CIB in Hong Kong.
"The market may have been affected by the volatile money
market in China. Investors are not satisfied with the size of
reverse repo," Cheung said.
The People's Bank of China injected 13 billion yuan ($2.14
billion) into the markets via open market operations for the
first time since Oct. 15.
RUPIAH
The rupiah slid as some foreign banks took profits from
Indonesian bonds, traders said.
Ten- and three-year bond yields rose.
Jakarta shares slid 0.7 percent, underperforming most
regional stocks.
The forward onshore market, or Jakarta Interbank Spot Dollar
Rate (JISDOR), was fixed at 11,076 per dollar,
compared with Friday's 11,018.
"The rupiah may weaken a bit more until the (October) CPI
number," is out later this week, said a Jakarta-based trader,
adding it may weaken to 11,120.
RINGGIT
The ringgit fell as the likes of leveraged funds took
profits after it had risen on Malaysian government measures to
stem a fiscal deficit.
The three-year government bond yield rose to
3.151 percent from Monday's 3.097 percent.
"The post budget euphoria is over," said a senior Malaysian
bank trader in Kuala Lumpur, adding he prefers selling the
ringgit on rallies.
The Malaysian currency on Monday hit its strongest level in
more than four months after the government on Friday announced a
higher-than-expected goods and services tax of 6 percent for
2015 and abolished subsidies on sugar. The government also hiked
property taxes to curb surging home prices.
PHILIPPINE PESO
The peso eased as local interbank speculators
covered short dollar positions before the Fed meeting.
"A risk that the Fed does not say anything more dovish than
what is priced in could support the dollar," said a senior
Philippine bank trader in Manila.
The Philippine currency could weaken to 43.40, the trader
said.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0430 GMT
Currency Latest bid Previous day Pct Move
Japan yen 97.55 97.67 +0.12
Sing dlr 1.2377 1.2375 -0.02
Taiwan dlr 29.413 29.460 +0.16
Korean won 1060.70 1061.10 +0.04
Baht 31.05 31.07 +0.05
Peso 43.14 43.05 -0.20
Rupiah 11090.00 11048.00 -0.38
Rupee 61.64 61.52 -0.19
Ringgit 3.1415 3.1355 -0.19
Yuan 6.0878 6.0855 -0.04
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 97.55 86.79 -11.03
Sing dlr 1.2377 1.2219 -1.28
Taiwan dlr 29.413 29.136 -0.94
Korean won 1060.70 1070.60 +0.93
Baht 31.05 30.61 -1.42
Peso 43.14 41.05 -4.83
Rupiah 11090.00 9630.00 -13.17
Rupee 61.64 54.99 -10.78
Ringgit 3.1415 3.0580 -2.66
Yuan 6.0878 6.2303 +2.34
($1 = 6.0855 Chinese yuan)
(Additional reporting by IFR Markets' Catherine Tan; Editing by
Shri Navaratnam)
