* Peso hits a one-month high; intervention talk caps
* Rupiah flat as intervention offset outlook downgrade
* Won up on exporters, stop-loss dlr selling
* Baht at 7-wk low; may head to 29.879/dlr
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, May 3 (Reuters) - The Philippine peso hit a
one-month high on Friday after the country won another
investment grade rating, while most other emerging Asian
currencies also rose as the European Central Bank's rate cut
boosted risk sentiment.
But the Indonesian rupiah was barely changed after
Standard & Poor's lowered the country's rating outlook.
The peso rose 0.3 percent to 40.915 per dollar,
its strongest since April 3, after S&P on Thursday raised
Philippines' credit rating to investment grade.
That came less than two months after Fitch Ratings made a
similar move, and were expected to boost foreign capital inflows
further.
The S&P's decisions provided chances to buy the peso
against the rupiah, ANZ said.
"Apart from a divergence in inflation and fiscal trends, the
peso will remain underpinned by an improving external balance
while the rupiah is vulnerable to a further deterioration in the
current account," said ANZ in a note.
"With this and the divergence in rating prospects, we see
the possibility of a resumption of an uptrend in PHP/IDR, after
a brief retracement in April," it said, recommending a long
three-month peso/rupiah non-deliverable forward position.
Against the rupiah, the spot peso gained 0.3 percent to
238.08, its highest since April 4.
But investors stayed cautious over possible steps by
Philippine central bank, with the authority suspected of
intervening to stem the currency's appreciation, traders and
analysts said.
Bangko Sentral ng Pilipinas is expected to intervene again
and further cut yields on peso deposits in order to curb the
peso's appreciation, traders and analysts said.
"Persistent downward pressure (on dollar/peso) is likely to
remain and we suggest shorting the USD/PHP on upticks in the
near-term," Maybank said.
"However, we maintain our forecast for the pair to be at
41.00 by 2Q-13, 40.50 by 3Q-13 and 39.50 by end-2013 as we take
into consideration potential 'leaning against the wind'
activities by BSP," it added.
Maybank expects the authority to use macro-prudential and
liquidity measures to deal with currency volatility, and also
forecast more cuts to the rate on the peso short-term deposit
scheme.
Hours after the S&P upgrade on Thursday, central bank
governor Amando Tetangco said on Thursday the country has no
plans to impose controls on portfolio inflows at the moment. [
The central bank recently cut the special deposit account
(SDA) rate to 2.0 percent across all tenors, bringing total
reductions in the rate to more than 200 basis points since July
2012.
Last month, it also liberalised rules on foreign currency
transactions, allowing residents to invest in property abroad
and offshore funds.
Those measures came as the central bank is seen running out
of funds for intervention. With such efforts, the peso has
appreciated a mere 0.3 percent so far this year.
The Philippines is not the only country which is expected to
stem currency volatility.
The Thai baht hit a near seven-week low as the
government kept urging the central bank to take measures,
including a rate cut, to curb the best performing Asian currency
in 2013.
RUPIAH
The rupiah initially edged lower after S&P's downgrade of
Indonesia's sovereign rating outlook to stable from positive.
But the central bank was spotted buying the rupiah at 9,740
per dollar to limit its downside, traders said.
Still, the Indonesian currency is expected to ease further
due to the downgrade, traders said.
"The news added up to the market sentiment for higher
benchmark rate and the rupiah will weaken," said a Jakarta-based
trader.
"Dollar/rupiah will be capped below 9,750 first. If that is
breached, then the market will observe 9,800," the trader added.
WON
The won rose up to 0.4 percent to 1,097.0 per dollar, its
strongest since March 13, strengthening past resistance at
1,100.
Exporters' demand for settlements spurred stop-loss dollar
selling, although the foreign exchange authorities were spotted
intervening around 1,098, traders said.
But traders hesitated to chase the South Korean currency,
saying intervention could intensify.
The caution increased as the won rose 0.6 percent
to 11.1764, a notch weaker than a near five-year high of 11.1468
hit in late April.
"They must be ready. So, it is difficult to add long won
positions here," said a senior foreign bank trader in Seoul.
RINGGIT
The ringgit rose as some investors saw worries about a
general election on Sunday as overdone.
A senior source at a major Malaysian bank said a possible
opposition win would not alter Malaysia's solid fundamentals or
the key reforms being undertaken by the current government.
If the ringgit weakens past 3.1000 per dollar after the
election, that could be a good chances to buy it, the source
said.
Any post-election selloff in local shares should be
bought near 1,600, he added.
BAHT
The baht fell as much as 0.9 percent to 29.690 per dollar,
its weakest since March 18 as investors covered dollar-short
positions.
On Thursday, Thailand's finance minister said he was worried
the economy could be hurt by the baht's strength as the central
bank refused to cut interest rates to hold it down and had not
come up with alternative measures to curb the currency.
As the government kept pressing the central bank to take
steps, the baht is seen weakening further, traders and analysts
said.
Technically, the baht may head to 29.879, the 38.2 percent
Fibonacci retracement of its appreciation between June 2012 and
April this year.
The Thai currency weakened past 29.422, a current 55-day
moving average. It had been closing daily session firmer than
the average since late July last year.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0700 GMT
Currency Latest bid Previous day Pct Move
Japan yen 98.03 98.00 -0.03
Sing dlr 1.2339 1.2348 +0.07
Taiwan dlr 29.515 29.636 +0.41
Korean won 1096.81 1101.60 +0.44
Baht 29.58 29.42 -0.54
Peso 40.92 41.05 +0.33
Rupiah 9735.00 9735.00 +0.00
Rupee 53.89 53.81 -0.15
Ringgit 3.0355 3.0510 +0.51
Yuan 6.1556 6.1560 +0.01
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 98.03 86.79 -11.47
Sing dlr 1.2339 1.2219 -0.97
Taiwan dlr 29.515 29.136 -1.28
Korean won 1096.81 1070.60 -2.39
Baht 29.58 30.61 +3.48
Peso 40.92 41.05 +0.33
Rupiah 9735.00 9630.00 -1.08
Rupee 53.89 54.99 +2.04
Ringgit 3.0355 3.0580 +0.74
Yuan 6.1556 6.2303 +1.21
(Additional reporting by Yena Park in SEOUL; Editing by Kim
Coghill)
