Thai Baht Nears Five Month High Vs Usd

[george]

Thai baht nears five month high vs USD

BANGKOK: -- The baht yesterday hit a nearly five-month high against the weak US dollar, as investors shift to higher-risk assets and the influx continues of foreign funds to purchase Thai shares.

The baht opened at Bt34.83-Bt34.85 to the greenback and closed at Bt34.56-Bt34.58, off the day's high at Bt34.50.

Seven of Asia's 10 mostactive currencies, excluding the yen, gained against the dollar, while the benchmark MSCI Asia Pacific Index rallied for a sixth straight day.

A local currency trader said Finance Minister Korn Chatikavanij's remark that Thailand would post a currentaccount surplus also gave a boost to the baht.

The baht's recent appreciation continues and the unit is likely to test the psychological Bt34/$ level soon, the trader said.

"Declining risk aversion sees people cutting demand for the greenback to move money back into the region's stock markets, including Thailand," Charl Kengchon, an economist at Kasikorn Research, was quoted as saying by Bloomberg.

"The baht is also gaining support from the huge surpluses in the trade and current accounts as imports shrink," he said.

Kasikorn Research Centre said in a paper released yesterday that the baht's appreciation was inevitable, as the selling spree in US dollars would continue and Thailand is predicted to record a US$8 billion (Bt276 billion) trade surplus this year, compared with a mere $200 million last year.

However, inflow in Asian stock markets - a key factor pushing the baht up - will be tested occasionally throughout the year, as the global recession has not yet reached the bottom and Thailand's trade surplus in the remainder of the year will be lower than in the first quarter, the paper stated.

Meanwhile, Thai shares yesterday swung wildly. The SET Index started the day with a gain and briefly headed south before closing at 535.18 points for a gain of 1.41 per cent, off the day's peak at 540.22. Turnover was heavy at Bt30.33 billion.

Big marketcap energy stocks led the rise. PTT was up 3.77 per cent at Bt220, PTT Aromatics and Refining rocketed up 11.04 per cent to Bt17.10, Thai Oil jumped 7.19 per cent to Bt37.25, IRPC surged 5.92 per cent to Bt3.22 and PTT Chemical shot up 15.61 per cent to Bt50.

An analyst at DBS Vickers Securities said that selling on the facts might be seen in energy, agribusiness, and commercial and residential real estate stocks when they announce their first-quarter results this week.

Even if the SET Index corrects slightly, the uptrend will continue as long-term investors consider local stock prices are not overvalued and forecast that 2010 corporate earnings will recover strongly, the analyst said.

Commodity-related firms, including oil, natural gas, petrochemical, steel and agribusiness, are expected to deliver strong gains in their 2010 earnings, thanks to the expected economic recovery, the analyst added.

The broker estimated that the 2010 earnings of stocks under its coverage, which represents 70 per cent of the SET's market capitalisation, would rise by 16 per cent year-on-year, compared with a 3-percent year-on-year increase forecast for 2009 earnings.

The securities house's top picks are PTT Exploration and Production, PTT, Kasikornbank, Thai Vegetable Oil, Advanced Info Service, CPN Retail Growth Fund, Supalai, Italian-Thai Development, Sino-Thai Engineering and Construction and Tata Steel (Thailand).

An analyst at Finansa Securities said the volatility in the Thai stock market yesterday could be ascribed to profit taking, following the strong gain propelled by the euphoria in overseas stock markets as the US banks' stress test results were in line with expectations.

The resurgence of the red-shirt rally and the swine-flu outbreak are factors that investors should keep a close watch on, the analyst said.

The broker's strategy is profit-taking for short term investors and buying on weakness for long-term investors.

-- The Nation 2009-05-12

[jdrake72]

This is funny.Trade surplus is just for the reason that Thai economy is collapsing, much worse than US and so imports are totally frozen,not coz trade is good.

GDP is amongst the worse in the region, and budget deficit is rising at alarming levels.

Interest rate is amongst the lowest and currency risk also is amongst the worse: Risky assets can stimulate the appetite of investors when they give a high return, but Thailand interest rate is amongst the bottom in Asia.

Moreover,Nowhere in the world you see international airports taken with thousands of tourists trapped as hostages; and Chiefs of states fleeing away in helicopter.

Add one the world most repressive media and government with coups, hundreds of demostrators massacred (and their corpses burnt), martial laws, states of emergency, the investors and tourists threated worse than animals, and the baht rising like crazy almost 5% in just few weeks: That's the biggest scam of international financial history and the Baht collapse -when it will occur- will be brutal

Thailand will not recover like the other countries in the region and most of the world, its economy will plunge worse and worse, you cannot pretend to attract investors with amongst the harshest laws against investment and how you lure tourists if policemen stops foreigners walking in the streets and threat to put them in jail they don't give them all their belongings (it is happening daily and it has happened to myself twice in the past 4 months).

You can't deceive the world indefinitely with the world most overvalued currency and play stability when it is clear this is one of the world most unstable country for a foreigner.

Edited May 12, 2009 by jdrake72

[Maigo6]

This is funny.

Trade surplus is just for the reason that Thai economy is totally collapsing, much worse than US and so imports are totally frozen,not coz trade is good.

GDP is amongst the worse in the region, and bduget deficit is rising at alarming levels.

Interest rate amongst the lowest and currency risk also amongst the worse.

Nowhere in the world you see international airports taken with thousands of tourists trapped as "hostages" and Chiefs of states fleeing away in helicopter.

Add one the world most repressive media and government with coups, hundreds of demostrators massacred (and their corpses burnt), martial laws, states of emergency, the investors and tourists threated worse than animals, and the baht rising like crazy almost 5% in just few weeks: That's the biggest scam of international financial history and the Baht collapse -when it will occur- will be brutal.

Thailand will not recover like the other countries in the region and most of the world, its economy will plunge worse and worse, you cannot pretend to attract investors with amongst the harshest laws against investment and how you lure tourists if policemen stops foreigners waliking in the streets and threat to put them in jail they don't give them all their belongings (it is happening daily and it has happened to myself twice in the past 4 months).

You can't deceive the world indefinitely with the world most overvalued currency and play stability when it is clear this is the world most unstable country for a foreigner.

Yet you still stay, why ?

I know I wouldn't if I felt the same way. Robbed twice in 4 months by Police in the streets, I've never heard of that one before and I've been in Thailand since 1990, learn something new all the time I guess.

I'll pack my bags and leave Thailand tomorrow, thanks for the heads up.

Hang on a minute, you're leaving with me right ?

Edited May 12, 2009 by Maigo6

[Artisi]

This is funny.Trade surplus is just for the reason that Thai economy is collapsing, much worse than US and so imports are totally frozen,not coz trade is good.

GDP is amongst the worse in the region, and budget deficit is rising at alarming levels.

Interest rate is amongst the lowest and currency risk also is amongst the worse: Risky assets can stimulate the appetite of investors when they give a high return, but Thailand interest rate is amongst the bottom in Asia.

Moreover,Nowhere in the world you see international airports taken with thousands of tourists trapped as hostages; and Chiefs of states fleeing away in helicopter.

Add one the world most repressive media and government with coups, hundreds of demostrators massacred (and their corpses burnt), martial laws, states of emergency, the investors and tourists threated worse than animals, and the baht rising like crazy almost 5% in just few weeks: That's the biggest scam of international financial history and the Baht collapse -when it will occur- will be brutal

Thailand will not recover like the other countries in the region and most of the world, its economy will plunge worse and worse, you cannot pretend to attract investors with amongst the harshest laws against investment and how you lure tourists if policemen stops foreigners walking in the streets and threat to put them in jail they don't give them all their belongings (it is happening daily and it has happened to myself twice in the past 4 months).

You can't deceive the world indefinitely with the world most overvalued currency and play stability when it is clear this is one of the world most unstable country for a foreigner.

Please supply link to " hundreds of demonstrators massacred (and their corpes burnt)" as I seemed to have missed this bit of important information.

[jdrake72]

This is funny.

Trade surplus is just for the reason that Thai economy is totally collapsing, much worse than US and so imports are totally frozen,not coz trade is good.

GDP is amongst the worse in the region, and bduget deficit is rising at alarming levels.

Interest rate amongst the lowest and currency risk also amongst the worse.

Nowhere in the world you see international airports taken with thousands of tourists trapped as "hostages" and Chiefs of states fleeing away in helicopter.

Add one the world most repressive media and government with coups, hundreds of demostrators massacred (and their corpses burnt), martial laws, states of emergency, the investors and tourists threated worse than animals, and the baht rising like crazy almost 5% in just few weeks: That's the biggest scam of international financial history and the Baht collapse -when it will occur- will be brutal.

Thailand will not recover like the other countries in the region and most of the world, its economy will plunge worse and worse, you cannot pretend to attract investors with amongst the harshest laws against investment and how you lure tourists if policemen stops foreigners waliking in the streets and threat to put them in jail they don't give them all their belongings (it is happening daily and it has happened to myself twice in the past 4 months).

You can't deceive the world indefinitely with the world most overvalued currency and play stability when it is clear this is the world most unstable country for a foreigner.

Yet you still stay, why ?

I know I wouldn't if I felt the same way. Robbed twice in 4 months by Police in the streets, I've never heard of that one before and I've been in Thailand since 1990, learn something new all the time I guess.

I'll pack my bags and leave Thailand tomorrow, thanks for the heads up.

Hang on a minute, you're leaving with me right ?

that happens daily around here. Tourists are robbed either by cops or by thugs and in the police station they just laugh at your face and throw you away calling you shit farang. The same at the tourist buses constantly robbed by putting anesthetic in the air condition system...every day the same story for years (i haven t had this piece of experience ,but many tourists here have) and policemen just laugh at your face (after taking a share of the loots, of course).... BTW, I have a wonderful Thai wife and I am not about leaving for this reason. (I would love to see Thai women running this country...)

Anyway, that's not the main issue, the main issue are the lies constantly told by the government in these past months, the economy, stability, stimulus package (they are propping up taxes to cover the gap of the ammount of the stupid stimulus package),...every day you will hear a different story by the govt. but their lies are just pathetic.

They are covering a disastrous economic situation with plunging exports and even more plunging imports with a econimic "boom" causing unprecedent trade surplus..... there are many ways to deceive people, but these guys have a real shameless imagination.

GDP 2009 in Thailand has great chance to be even worse than 2009 GDP in USA...watch the numbers coming in the next months....

Edited May 12, 2009 by jdrake72

[jdrake72]

This is funny.Trade surplus is just for the reason that Thai economy is collapsing, much worse than US and so imports are totally frozen,not coz trade is good.

GDP is amongst the worse in the region, and budget deficit is rising at alarming levels.

Interest rate is amongst the lowest and currency risk also is amongst the worse: Risky assets can stimulate the appetite of investors when they give a high return, but Thailand interest rate is amongst the bottom in Asia.

Moreover,Nowhere in the world you see international airports taken with thousands of tourists trapped as hostages; and Chiefs of states fleeing away in helicopter.

Add one the world most repressive media and government with coups, hundreds of demostrators massacred (and their corpses burnt), martial laws, states of emergency, the investors and tourists threated worse than animals, and the baht rising like crazy almost 5% in just few weeks: That's the biggest scam of international financial history and the Baht collapse -when it will occur- will be brutal

Thailand will not recover like the other countries in the region and most of the world, its economy will plunge worse and worse, you cannot pretend to attract investors with amongst the harshest laws against investment and how you lure tourists if policemen stops foreigners walking in the streets and threat to put them in jail they don't give them all their belongings (it is happening daily and it has happened to myself twice in the past 4 months).

You can't deceive the world indefinitely with the world most overvalued currency and play stability when it is clear this is one of the world most unstable country for a foreigner.

Please supply link to " hundreds of demonstrators massacred (and their corpes burnt)" as I seemed to have missed this bit of important information.

i don't think you have a chance to see that in a country with amongst the most repressive and censored media. Look at the next reports in Reporters without borders...let's stop talking about this and concentrate in the economy....since i want to live longer ;-) ...ai am actually few steps away from a main corrupt police station....

[jdrake72]

I link this post of few days ago...

http://www.thaivisa.com/forum/Abhisit-August-t262964.html

Are These the perspective of stability the Govt. is trying to give us just with the illusion of a "strong currency" ?

Stability in Thailand....yes, that's really funny. Just like cactus in the amazonas....

That's just a game: there is lots of black money here (the real black money markets are NOT listen amongst the safe heavens list) and there are big interests not to let the baht dropping, theorically it could last like this for long time (like the Lebanese currency has survived devaluation despite civil wars, pseudo-government, bombing, etc...), but nothing lasts forever.

International reserves of Thailand will probably peak this month around 120b, which is lots of money indeed, but they will probably start to decline in the coming months, since forward position are now virtually zero.

Edited May 12, 2009 by jdrake72

[Thailand]

I link this post of few days ago...

http://www.thaivisa.com/forum/Abhisit-August-t262964.html

but nothing lasts forever.

International reserves of Thailand will probably peak this month around 120b, which is lots of money indeed, but they will probably start to decline in the coming months, since forward position are now virtually zero.

And therein lies the reason why the baht has been at it's high's despite all the problems-sufficient reserves to back it up. And as the op says it will soon be on the decline as there will be little inflow of foreign currency to maintain the reserves.

[animatic]

Crying shame this exchange rate.

Makes them think they save face by it seeming strong,

but for the countries well being it WEAKENS the country...

Central Bank thought process in idle....

[churchill]

Up today down tomorrow . markets .

[baht&sold]

Finance minister urges BoT to ensure baht stability

BANGKOK, May 12 (TNA) – Finance Minister Korn Jatikavanich on Monday urged the Bank of Thailand (BoT) to ensure the stability of the baht, saying the continued strengthening of the currency could affect the country’s export competitiveness.

He conceded the baht appreciation to the level of 34.83-34.85 to the US dollar in Monday’s morning trading session was attributable to Thailand’s current account surplus of up to US$10 billion.

However, he said that comparisons between the baht and the currencies of neighbouring countries must take into account their competitiveness as well.

The Thai finance minister allowed that the recent baht rise had undermined Thailand’s export competitiveness in terms of prices.

In consequence, he called on Thailand’s central bank to closely supervise the baht to ensure its stability so that the country would not lose its export markets.

“To supervise the baht, we have to take into consideration all factors concerned. The currency value must be compared with that of currencies other than the US dollar (alone),” he said. (TNA)

Business News : Last Update : 08:37:47 12 May 2009 (GMT+7:00)

-- TNA May 12, 2009

--------------------------------------------------------------------------------------------

European capital inflow continues boosting Thai market, says SET chairman

BANGKOK, May 12 (TNA) – The continued rally of Thai stocks stems from the renewed inflow of European capital into Asian stock markets including the Thai bourse, according to the Stock Exchange of Thailand (SET) chairman Pakorn Malakul Na Ayudhaya.

Since early this year the SET composite index had risen by around 17 per cent -- close to that of stock markets of neighbouring countries such as Singapore and Hong Kong -- where the composite index soared 20 per cent, he said.

Mr. Malakul predicted that the SET index would continue rallying because the stress test conducted in the financial sector of the United States produced a positive result, which could help boost investor confidence.

He conceded the political uncertainty continued to put the Thai bourse under pressure, but he believed the situation would gradually improve.

The SET index consolidated its position in Monday morning trading by staying at 526.75 points before surging to 540.22 and closing the session at 539.02, up 11.30 points or 2.14 per cent.

The index lost its gain in the afternoon session and closed at 535.18, up 7.46 points or 1.41 per cent, with a daily trading value of Bt30.33 billion. (TNA)

Business News : Last Update : 08:39:06 12 May 2009 (GMT+7:00)

-- TNA May 12, 2009

--------------------------------------------------------------------------------------------------

Treasury Outlook

source: The Nation May 12, 2009

By Thiti Tantikulanan is head of capital markets business at Kasikornbank

Since the beginning of this year, the foreignexchange market has been volatile but non-directional for the most part.

This is due to the current influence on the forex rate from global factors rather than local factors.

In particular, Asian regional currencies have been moving in a pack, reacting to the fluctuating level of risk appetite in the world financial market.

When there is bad news in world financial markets, risk appetite wanes and the US dollar appreciates - as the market is treating the US dollar as a safe haven.

When there is good news, risk appetite sharpens and the dollar depreciates as investors diversify out of US assets.

After moving mostly sideways, the dollar is now breaking out of its range and taking a depreciating path as risk appetite comes back to the market.

In the past month, the greenback has lost 6.8 per cent against the Korean won, 3.8 per cent against the Singapore dollar and British pound, 3.3 per cent against the euro and 2 per cent against the baht.

The Libor rate, the lending rate among financial institutions, has fallen from 1.68 per cent to 1.46 per cent, indicating that banks are feeling easier about each other's credit risk.

The VIX, or volatility index, has fallen to 32, a level not seen since before Lehman's bankruptcy. The global oil price also has recovered from the low of $35 per barrel to $58 a barrel, a level not seen since last November.

The above indicators are pointing to improving economic sentiment. Whether this trend will continue is probably too early to tell.

For one thing, the global economy runs on credit, specifically credit expansion. If US financial institutions' balance sheets aren't healthy yet, then they can't lend adequately and business activities will not recover fast enough.

What it is signalling is that perhaps a floor may have been found for this recession. What exacerbated the slowdown in the export sector last year was the running down of inventories by businesses to reduce risk and conserve cash.

As those inventories have reached a depleting level, replacement orders are coming back in and should breathe some life back into international trade and export sectors.

Perhaps the most important signal that we can glean from the above improving economic sentiment is that it is reintroducing two-way risk back into the baht exchange rate.

Since April of last year, the baht has been on a medium term weakening trend when it depreciated from 31.4 to 36.5.

Whether this weakening trend is over will depend not just on Thai economic fundamentals but also on the global US dollar outlook and as well as risk appetite in the financial markets.

Lastly, one local economic fundamental figure that is worth mentioning is that in the first quarter, the trade and current accounts showed surpluses of $7.7 billion and $9.1 billion respectively - record surpluses for a quarterly period - which helped in pushing the baht up.

-- The Nation May 12, 2009

Edited May 12, 2009 by baht&sold

[cmdream]

Good for Thailand, I for one will be leaving after 4 years here. I hope they recover without my dollars each month coming into their

economy. It is very obvious now that they want all faranges out

of THEIR country. I wish them well, I love it here but now I feel unwanted, could explain the <deleted> we get from immigration !

I found a very nice country to spend my dollars so goodbye Thai.

Hope you believe the BS you are telling your people. This can only end in war. Ride my see /saw. China will own you soon. Chok Dee

[Time Traveller]

This is funny.Trade surplus is just for the reason that Thai economy is collapsing, much worse than US and so imports are totally frozen,not coz trade is good.

Yes, but when times get tough, Thais save money. Hence the trade surplus. Unlike americans that ran trade deficits for decades and now wonder why it's difficult to borrow anymore money, consumers have stopped spending, and the economy is bad.

GDP is amongst the worse in the region, and budget deficit is rising at alarming levels.

No I think you'll find Singapore and other countries with even worse gdp performance. Also many countries are seeing budget deficit rising, but no where like those western nations. e.g US. Even Australia (the star performer of western nations) recently announced their largest budget deficit in history.

Interest rate is amongst the lowest and currency risk also is amongst the worse: Risky assets can stimulate the appetite of investors when they give a high return, but Thailand interest rate is amongst the bottom in Asia.

Interest rates are low, but compared to another country about average. It is not the lowest rate in Asia and in any case central banks lower interest rates so as to help the economy but making costs lower for companies to borrow money. Hence investors may feel that such moves may mean that this is the low in the business cycle and business activity will pick up from here.

Add one the world most repressive media and government with coups, hundreds of demostrators massacred (and their corpses burnt), martial laws, states of emergency, the investors and tourists threated worse than animals, and the baht rising like crazy almost 5% in just few weeks:

Currency markets are volatile. Live with it. Investors only care about making a suitable return on investment, and not about politics or media. Have we seen looting of homes and shops like in New Orleans? Has anyone heard of factories being burnt down by angry mobs? Has anyone heard of foreign businessmen being held for ransom like in African, Persian countries ? NO. NO. NO.

Accept the truth, all of the political problems are very minor for most business people (tourism might be the exception but it is not the rule).

If Democracy was required for a good economy, ask yourself why is US and most of euorpe in such a terrible situation? Why do countries like China have such an enviable financial position?

That's the biggest scam of international financial history and the Baht collapse -when it will occur- will be brutal

Thailand will not recover like the other countries in the region and most of the world, its economy will plunge worse and worse, you cannot pretend to attract investors with amongst the harshest laws against investment and how you lure tourists if policemen stops foreigners walking in the streets and threat to put them in jail they don't give them all their belongings (it is happening daily and it has happened to myself twice in the past 4 months).

You could be waiting a long time for any "brutal" baht collapse. Personally I'd be more worried about a dollar collapse.

You can't deceive the world indefinitely with the world most overvalued currency and play stability when it is clear this is one of the world most unstable country for a foreigner.

Worlds most overvalued currencty, says who?

[katabeachbum]

Interest rate is amongst the lowest and currency risk also is amongst the worse: Risky assets can stimulate the appetite of investors when they give a high return, but Thailand interest rate is amongst the bottom in Asia.

With homeloans at 6,25-6,9% interest (MLR)? Where in Asia is it higher?

[Burr]

Exchange rate is bad here also (Philippines) so I take it easy.

I can get into the Paso savings and then put it back later. We can also borrow at 2% when you consider the 6% we earn on saves. They charge 8%.

I can also borrow to pay the bills then use my SS check to buy stock when I """THINK""" I got a winner!!!

Edited May 13, 2009 by Burr

[Pierrot]

We got our salary in HK, so the higher exchange rate is no good news. We still have a mortgage in Bangkok and we were expecting a drop of the Thai Baht to pay it off

On the other hand our stocks are going up and we are now more confident not to get fired.

So, as Burr, so far so good ...

[khunjamespittman]

This is funny.

Trade surplus is just for the reason that Thai economy is totally collapsing, much worse than US and so imports are totally frozen,not coz trade is good.

GDP is amongst the worse in the region, and bduget deficit is rising at alarming levels.

Interest rate amongst the lowest and currency risk also amongst the worse.

Nowhere in the world you see international airports taken with thousands of tourists trapped as "hostages" and Chiefs of states fleeing away in helicopter.

Add one the world most repressive media and government with coups, hundreds of demostrators massacred (and their corpses burnt), martial laws, states of emergency, the investors and tourists threated worse than animals, and the baht rising like crazy almost 5% in just few weeks: That's the biggest scam of international financial history and the Baht collapse -when it will occur- will be brutal.

Thailand will not recover like the other countries in the region and most of the world, its economy will plunge worse and worse, you cannot pretend to attract investors with amongst the harshest laws against investment and how you lure tourists if policemen stops foreigners waliking in the streets and threat to put them in jail they don't give them all their belongings (it is happening daily and it has happened to myself twice in the past 4 months).

You can't deceive the world indefinitely with the world most overvalued currency and play stability when it is clear this is the world most unstable country for a foreigner.

Yet you still stay, why ?

I know I wouldn't if I felt the same way. Robbed twice in 4 months by Police in the streets, I've never heard of that one before and I've been in Thailand since 1990, learn something new all the time I guess.

I'll pack my bags and leave Thailand tomorrow, thanks for the heads up.

Hang on a minute, you're leaving with me right ?

What part of the Post did you not understand? It was a statement about the state of the Thai economy and factor that nornamally influence the value of foreign currencies. Is there anything that was said that you disagree with? It seemed to be representative of the facts. The factors that normally dictate the rise and fall of international currency were pretty much covered.

There was nothing about the criteria for remaining in Thailand discussed. If that is the topic that you want to rant about I suggest that you create your worn out thread on on that topic. On the other hand you might re-read the post and see if you can contribute with some rationale why the Baht is so high. I am not an expert on foreign currency but on the surface I can't find the rationale that is being used to set the Baht.

[ray23]

Well somethings never change all the other currency in the region lost ground on the dollar a did most countries in he world. But, not Thailand. It's 34 folks and that is what they want. Sure the banks here are strong You are not going to get 34 when you do an exchange, they get a rake off every transaction. That's fair. They can sell dollar for more then they are buying them for. In the mean time the real economy suffers. It appears to me that there are few getting very rich at the expense of those that can least afford the losses.

The adds on Bloomberg TV are beginning to irk me Some Filino talking about how inexpense here. I wonder if the idiot ever went shopping in own country. Farrang tourist doing to cost comparison. Oh heck yes less them London, New York ect. But how does it stack up against the other countries in the region. You can still purchase a house in your wifes name here, but you can never own the dirt, compared to the western world. Bit are the cheap compared to Laos Cambodia, Malayasia.

If you compare apples to apples you will quickly realize this place is over priced. It's not the number they out on the currency how is your purchasing power compared to the three years ago. That's what really matters and mine i much lower even with gains in my retirement.

This is my home and I don't want to live anywhere else that doesn't mean I walk around all day blind folded.

"Asian Currencies Fall From Six-Week High on Bernanke Comments

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By Lilian Karunungan

July 22 (Bloomberg) -- Asian currencies slipped from near a six-week high after Federal Reserve Chairman Ben S. Bernanke said financial markets remain “stressed” and risks to an economic recovery persist.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-used currencies excluding the yen, declined for a second day on concern foreign funds will shun emerging-market assets after U.S. commercial lender CIT Group Inc. said it may file for bankruptcy. Bernanke told U.S. lawmakers yesterday that the Fed intends to maintain a “highly accommodative” monetary policy for an “extended period.”

“Bernanke’s statement was good to some extent in that he talked about support for the economy but he was quite clear a lot of uncertainty remains,” said Vishnu Varathan, a regional economist at Forecast Singapore Pte. “Investors are going to reflect that things haven’t improved drastically the way the second-quarter numbers are suggesting and whether excessive risk-taking is warranted.”

Indonesia’s rupiah weakened 0.3 percent to 10,085 as of 3:40 p.m. in Jakarta, according to data compiled by Bloomberg. The Malaysian ringgit dropped 0.2 percent to 3.5540, India’s rupee declined 0.2 percent to 48.5350 and Taiwan’s dollar fell 0.2 percent to NT$32.875.

Remain ‘Stressed’

The Asia Dollar Index slipped 0.1 percent to 107.99. It reached 108.28 on each of the last two days, the highest level since June 10. In his semi-annual testimony before the House Financial Services Committee, Bernanke said the U.S. economy is showing “tentative signs of stabilization” and didn’t indicate a sustained recovery has taken hold yet.

“The pace of decline appears to have slowed significantly,” he said. At the same time, “in light of the substantial economic slack and limited inflation pressures, monetary policy remains focused on fostering economic recovery.”

CIT said it may post a second-quarter loss of more than $1.5 billion and its “existing liquidity” is not enough to repay debt maturing next month. Financial firms worldwide have announced credit losses of about $1.5 trillion since the financial crisis began in the second half of 2007.

Barclays Plc will need another 12.8 billion pounds ($21 billion) and Royal Bank of Scotland Group Plc will require an additional 8.5 billion pounds to expand under new regulatory rules, the Telegraph reported, citing JPMorgan Securities Ltd.

The yen and the dollar strengthened against the euro as investors sought refuge in the currencies. The Japanese currency rose to 132.47 per euro from 133.36 in New York yesterday. It climbed to 93.37 versus the dollar from 93.74.

Malaysian Exports

Malaysia’s ringgit fell for a second day as Trade Minister Mustapha Mohamed said overseas sales may not rebound for another two months.

“The safety bid for dollars is weakening most Asian currencies,” said D. Sivadass, who trades currency forwards at EON Bank Bhd. in Kuala Lumpur. “Money is flowing back into U.S. assets as people avoid risky bets.”

Malaysian exports may not bottom out for another couple of months, Mustapha told reporters in Singapore today. The government “thought it would happen earlier but unfortunately it will be later than expected,” he said.

The economy probably shrank in the second quarter, reflecting “very much the same” performance in the first three months when gross domestic product contracted 6.2 percent form a year earlier, Bank Negara Malaysia said on July 8.

Stock Purchases

South Korea’s won traded near a six-week high against the dollar as overseas investors bought more local equities than they sold for a sixth day.

The currency is Asia’s best performer in the past week. The Bank of Korea will this week report gross domestic product expanded in the second quarter at the fastest pace in five years, according to economists surveyed by Bloomberg.

The won was 1,248.05 per dollar as of the 3 p.m. close in Seoul, compared with 1,248.70 yesterday, according to Bloomberg data. The currency has climbed 5.5 percent in the past six days and yesterday touched 1,239.38, its strongest level since June 4.

“When the won goes under 1,250, importers start buying dollars,” said Sam Hong, a currency dealer with Shinhan Bank in Seoul. “At 1,230 to 1,250, there’s very strong support” for the dollar, said Hong, who predicts the won will strengthen to 1,200 by the end of this year as the economy improves.

South Korea’s gross domestic product grew 2.2 percent in the second quarter from the previous three months, the most since 2003, according to the median estimate of economists surveyed by Bloomberg News before a July 24 report. The economy barely grew in the first quarter and contracted in the three months through December as recessions in the U.S., Europe and Japan battered exports.

Elsewhere, the Philippine peso fell 0.3 percent to 48.165 per dollar, the Thai baht was unchanged at 34 and Singapore’s dollar slipped 0.1 percent to S$1.4437. China’s yuan traded at 6.8305, from 6.8307 yesterday.

To contact the reporters on this story: Lilian Karunungan in Singapore at at [email protected].

Last Updated: July 22, 2009 04:52 EDT"