The Korean won fell and the Taiwan dollar retreated from a one-year high on Thursday as the central banks in these centres intervened to curb strength in their currencies against a weak US dollar. The dollar dropped in Asia after weak US jobs data and as investors moved into the Australian dollar and other growth-linked assets.
It was stronger against the yen whose rally in recent days seemed to have lost momentum with the passing of the quarter end. Markets in Hong Kong and China were closed for the Chinese national day.
KOREA WON: The Korean won fell about 0.1 percent to 1,179.10 a dollar, compared with Wednesday's close of 1,178.10/dlr, after it initially shot up more than 1 percent to hit a one-year high of 1,166.6. The won retreated as dealers reported authorities selling the local currency soon after the finance ministry warned it might act to counter "herd behaviour" in the foreign exchange market.
TAIWAN DOLLAR: The Taiwan dollar rose 0.3 percent in late Asian trade to 32.118 to the US dollar after it shot up to as high as 32.04 in early trade, the strongest intraday level since October 2 last year. Dealers said the central bank had intervened in the market to contain the Taiwan dollar, at the same time that South Korea's central bank had said it was ready to take action in forex markets if necessary.
Late on Wednesday, the Taiwan central bank said a media report suggesting the Taiwan dollar was undervalued was inaccurate and that it would ensure an orderly forex market if there were irregularities. Governor Perng Fai-nan also said during a parliament session on Wednesday that the central bank was ready to maintain order in the forex market if there were excessive fluctuations.
PESO: The Philippine peso rose 0.4 percent to 47.19 to the dollar from Wednesday's close of 47.39 as local markets prepared for more inflows into the country on expectations the central bank would maintain its policy stance at a review on Thursday. It rose as far as 47.14 in early deals.
"Inflows might come in due to an unchanged stance," said a Manila-based trader. "Sizeable bids are also seen lined up around 47.10 and 47.15," he said, adding players who had sold dollars in the early part of the peso's 1.7 percent rally in the past 2 weeks might look to book profits. A Reuters poll of 10 economists expects the Philippine central bank to keep the interest rate at a record low of 4 percent. The central bank is expected to maintain that policy will remain "accommodative".
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