EM ASIA FX-Philippine peso at 3-week high, GDP data backs case for rate hike
* Philippine Q2 GDP growth fastest in five quarters
* Rupiah edges down on importers' dollar demand
* Indonesia may revoke contracts of 17 coal miners
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, Aug 28 (Reuters) - The Philippine peso rose to
its strongest in more than three weeks on Thursday as better
than expected economic growth data boosted chances for a further
rate hike, while capital inflows fuelled further gains in most
emerging Asian currencies.
Indonesia's rupiah went against the trend, due to a
combination of importers need for foreign currency and concerns
over how exports will be affected if coal mining contracts are
revoked due to unpaid royalties.
The Philippine economy grew 6.4 percent in the second
quarter from a year earlier, the fastest pace in more than a
year, led by strong manufacturing and exports. That compared
with a Reuters poll forecast for 6.2 percent growth.
The data powered the peso to 43.55 per dollar,
its strongest since Aug. 5, even though it later gave up all the
gains amid month-end dollar demand from local companies.
"It puts PHP on a solid footing compared to other economies
in the region," said Jonathan Cavenagh, senior FX strategist
with Westpac in Singapore, who expects the central bank to raise
interest rates.
"BSP might continue to look to accumulate USD's but this is
probably the only factor that can stand in way of further PHP
strength," Cavenagh said, referring to the Bangko Sentral ng
Pilipinas.
The peso's one-month non-deliverable forwards (NDFs)
is likely to test 43.50 per dollar, he added.
The NDF barely changed at 43.65 as of 0430 GMT.
"Stronger-than-expected data will fuel stronger talks of
Moody's upgrading the Philippines very soon," said a senior
Philippine bank trader in Manila who saw spot peso possibly
strengthening to 43.20.
Moody's Investors Service currently has a "positive" outlook
for the Philippines' rating and its team just finished a visit
to the country.
RUPIAH
The rupiah edged down on dollar demand from
Indonesian importers for month-end payments.
On Wednesday, the director general for coal and minerals
said the country may revoke the contracts of 17 coal miners that
owe royalties to the government, including PT Arutmin Indonesia,
a unit of PT Bumi Resources Tbk.
"Coal contributes roughly 14 percent of total Indonesian
exports, so even if one-third of exports gets affected, it will
have quite a bit of impact on whether Indonesia can eke out
trade surplus or linger in the red," said Wellian Wiranto,
economist at OCBC Bank in Singapore.
"In the context of how Indonesia is trying to narrow its
current account deficit ahead of potential a Fed Fund rate hike
talks, this is obviously not helpful."
TAIWAN DOLLAR
The Taiwan dollar rose as much as 0.3 percent to
29.883 per U.S. dollar, its strongest since Aug. 13, on buying
by foreign financial institutions.
Foreign investors on Wednesday reported a ninth straight net
buying in local stocks.
Domestic exporters also bought the island's currency for
month-end settlements.
The central bank was spotted buying the U.S. dollar to curb
the island unit's appreciation, but the intervention looked
relatively small, traders said.
The central bank let the Taiwan dollar end the local market
stronger than 30.000 per dollar on Wednesday, for the first time
since July 11, traders said.
That came as the South Korean won hit a
seven-week high.
The central bank tends to closely look at the won as some of
the island's major companies, such as Taiwan Semiconductor
Manufacturing Co Ltd, compete with South Korea's
rivals in overseas markets.
BAHT
The baht advanced as much as 0.4 percent to 31.79
per dollar, its strongest since Aug. 18, as offshore funds
continued to buy Thai stocks and bonds.
Month-end dollar demand from importers also faded, traders
said.
Local banks, however, took profit from the currency's gains,
limiting its upside.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0420 GMT
Currency Latest bid Previous day Pct Move
Japan yen 103.71 103.88 +0.16
Sing dlr 1.2465 1.2478 +0.10
Taiwan dlr 29.883 29.985 +0.34
Korean won 1013.30 1014.40 +0.11
Baht 31.89 31.92 +0.11
Peso 43.66 43.66 +0.00
Rupiah 11690.00 11680.00 -0.09
Rupee 60.41 60.45 +0.07
Ringgit 3.1460 3.1465 +0.02
Yuan 6.1428 6.1432 +0.01
Change so far in 2014
Currency Latest bid End prev year Pct Move
Japan yen 103.71 105.28 +1.51
Sing dlr 1.2465 1.2632 +1.34
Taiwan dlr 29.883 29.950 +0.22
Korean won 1013.30 1055.40 +4.15
Baht 31.89 32.86 +3.06
Peso 43.66 44.40 +1.68
Rupiah 11690.00 12160.00 +4.02
Rupee 60.41 61.80 +2.30
Ringgit 3.1460 3.2755 +4.12
Yuan 6.1428 6.0539 -1.45
(Additional reporting by Rosemarie Francisco in MANILA, Lin
Miao-jung in TAIPEI and Satawasin Staporncharnchai in BANGKOK;
Editing by Simon Cameron-Moore)