* Thai Q1 GDP down 2.2 pct q/q, up 5.3 pct y/y; both below
* Thai fin min says worried about growth, wants rate cut
* Singapore dollar up on short-covering after worst week in
(Adds text, updates prices)
By Jongwoo Cheon
SEOUL, May 20 (Reuters) - The Thai baht hit a near
three-month low against the dollar on Monday as news the economy
shrank in the first quarter spurred expectations of a central
bank rate cut, while the Singapore dollar rebounded as its slide
last week was seen as excessive.
The baht fell as much as 0.3 percent to 29.88 per
dollar, its weakest since Feb. 26 after data showed the economy
had been hit by sluggish domestic demand and exports.
The weak data increased the chances of the Bank of Thailand
cutting its policy rate later this month amid mounting pressure
from the government to stem the baht's strength, traders and
Finance minister Kittirat Na Ranong pressed the central bank
for an interest rate cut as he was worried about the economy.
"It seems like they are going to go ahead with the cut and
this will induce the baht to trade with a weaker bias," said
Enrico Tanuwidjaja, an Asia economist at the Royal Bank of
Scotland in Singapore.
The government has been calling the central bank to lower
the policy rate, which currently stands at 2.75 percent, to
contain strength in best performing Asian currency this year.
The baht has appreciated 2.6 percent to the dollar so far
this year on bond inflows amid Japan's aggressive policy easing
and hopes that the government infrastructure projects may
attract large amounts of foreign money.
But the financial authorities have warned against such
appreciation and the Thai currency has lost as much as 4.5
percent since hitting a 16-year high in late April.
Some investors saw the loss as excessive with some covering
short positions in the baht despite the rate cut expectations,
saying they may buy the baht on dips.
Credit Agricole CIB's senior strategist Frances Cheung in
Hong Kong said she expects more bond inflows, although they are
likely to slower than before, to strengthen the baht to 28.40
per dollar by the end of the year.
But the authorities' steps could pose a risk to the
currency's upside, she emphasised.
"In short term, there is still a policy risk for capital
measures. If there are any drastic measures, this forecast is
under threat," Cheung said.
The baht is unlikely to escape from the dollar's recent
strength on expectations of the Federal Reserve reducing policy
stimulus, traders said.
The greenback stayed near its highest since July 2010
against basket of major currencies.
"The market was long dollar/baht and would like to sell the
pair at any uptick. But with (possible) U.S. QE withdrawal, the
dollar is still on an uptrend versus all currencies," said a
Thai bank trader in Bangkok.
Investors are keeping an eye on Fed Chairman Ben Bernanke's
testimony to Congress later this week as Bernanke has not
indicated that he wanted to taper the central bank's
quantitative easing any time soon.
The Singapore dollar gained as investors covered
short positions, seeing the city-states' currency as excessively
sold last week.
U.S. dollar/Singapore dollar's 14-day relative strength
index stood at 67.7, near the 70 threshold. An RSI above 70
indicates the currency is technically overbought.
Last week, the Singapore dollar fell 1.6 percent to the
greenback, the largest weekly percentage loss in a year,
according to Thomson Reuters data, on stop-loss selling and in
reaction to data showing April exports barely changed.
Hedge funds on Monday sold the city-state's currency on
rallies, limiting its upside, traders said.
The Taiwan dollar rose in the main local currency
market from Friday's close, which the central bank pushed down,
The island's currency rose 0.4 percent to 29.949 to the U.S.
dollar, compared with the previous local end of 30.060.
Local exporters bought the Taiwan dollar for settlements
when it was weaker than 30.000, while some outflows from foreign
financial institutions and central bank intervention capped the
unit, traders said.
On Friday, the Taiwan dollar stood at 29.938 before the
central bank's usual intervention at the local close, traders
CURRENCIES VS U.S. DOLLAR
Change on the day at 0630 GMT
Currency Latest bid Previous day Pct Move
Japan yen 102.66 103.21 +0.54
Sing dlr 1.2554 1.2592 +0.30
Taiwan dlr 29.949 30.060 +0.37
Korean won 1116.73 1116.40 -0.03
Baht 29.85 29.78 -0.23
Peso 41.22 41.20 -0.06
Rupiah 9755.00 9753.00 -0.02
Rupee 55.02 54.88 -0.25
Ringgit 3.0220 3.0220 -0.00
Yuan 6.1410 6.1419 +0.01
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 102.66 86.79 -15.46
Sing dlr 1.2554 1.2219 -2.67
Taiwan dlr 29.949 29.136 -2.71
Korean won 1116.73 1070.60 -4.13
Baht 29.85 30.61 +2.55
Peso 41.22 41.05 -0.41
Rupiah 9755.00 9630.00 -1.28
Rupee 55.02 54.99 -0.05
Ringgit 3.0220 3.0580 +1.19
Yuan 6.1410 6.2303 +1.45
(Additional reporting by Jeanny Kao in TAIPEI and IFR Markets'
Catherine Tan in Singapore; Editing by Eric Meijer)