The South Korean won led a rebound in Asian currencies on Thursday as investors snapped up regional stocks after the US Federal Reserve painted a less gloomy picture for the world's largest economy. The Philippine peso and Thai baht gained against a broadly weaker dollar.
But they were capped by suspected official intervention as Asian authorities fear losing export competitiveness at a time when the global recovery is not yet on solid footing. The Fed said it would slow the pace at which it buys Treasuries by extending the duration, but not the size, of its $300 billion programme to buy long-term government securities.
WON The won gained almost 1 percent to 1,234.8 per dollar, reversing its slide in the past few days as foreign investors bought local stocks as risk appetite rose. One-month implied volatilities in the won eased to 14.5 percent from Wednesday's close at 14.8 percent, as investors believe the won's underlying strength remains intact despite its recent slide.
PESO The peso gained a third of a percent to 47.90 per dollar, but the unit's strength was checked by suspected official dollar-buying intervention. "Dollar/peso has mostly followed in the track of a weak dollar," says a dealer in Manila. "BSP (the central bank) was seen initially on the bid at 48.00 until 47.97 levels." Meanwhile, three-month offshore dollar/peso non-deliverable forwards eased to 48.24, implying a 0.6% peso fall from the spot compared to 0.7 percent on Wednesday.
BAHT The baht inched up to 34 per dollar from Wednesday's close at 34.02, but suspected dollar-buying intervention by the central bank pushed it back to 34.06. "The baht is steady now with intervention supporting the dollar," said a Bangkok-based trader.
Westpac strategist Sean Callow believes that Thai authorities are extremely sensitive to any baht rise, pointing to Finance Minister Korn Chatikavanij's remarks last week that he would like to see a weaker baht to help the country's export-driven economy.
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