Emerging Forex-Asia little changed

Singapore, June 11: The Indonesian rupiah rebounded on Monday from last week's sell-off, which was fuelled by heightened risk aversion due to concern about rising global interest rates, and most other Asian currencies were steady.

The high-yielding rupiah was up nearly 0.6 percent from late Asian trade on Friday at 9,030 per dollar after rising as far as 9,000 per dollar. The rupiah fell almost 3 percent last week.

''There's not much activity at this early stage; it's opened higher following the offshore levels last week,'' said a trader in Jakarta.

The New Zealand dollar tumbled more than 1 percent against the U.S. dollar and currency traders in Asia cited rumours that the Reserve Bank of New Zealand was intervening to sell the kiwi.

There was no immediate knock-on effect on Asian currencies.

The ringgit hovered near 3.46 per dollar, little changed from Friday's close.

Philippine markets were closed for a public holiday.

The Singapore dollar fell as far as 1.5425 per dollar, down nearly 0.3 percent from late Asian trade on Friday as investors took profits from the currency's recent gains.

Analysts are generally positive about the long-term strength of Asian currencies, although they could face near-term pressure.

''We think that the recent bout of risk aversion experienced in many emerging markets will likely mirror the temporary disruptions in ... 2007, rather than the more pronounced correction beginning in May 2006,'' said Christy Tan, currency strategist at Bank of America.

JPMorgan strategists Claudio Piron and Yen Ping Ho expected the ringgit, rupiah and peso to see further selling pressure, although the volatility could be limited by central banks.

''While we acknowledge that position liquidation could continue into the immediate term in view of the U.S. treasury yield rise and dollar strength, we stress that rising global yields have been the result of better global data rather than an outright inflation scare,'' they said in a research note.

''In this context, Asia FX is only likely to recover when evidence of benign inflation is confirmed toward the end of this week,'' they said.

The dollar hovered near a two-month high against the euro , holding on to gains made late last week when the benchmark U.S. Treasury yield jumped to its highest level in around a year.

Reuters >