The South Korean won, which outperformed many regional peers this month, edged higher on Friday and was seen likely to stay firm in the near term due to the potential for more inflows from overseas investors. Most emerging Asian currencies rose moderately on Friday, helped by an improvement in investor risk appetite following this week's aid deal for Greece, although month-end dollar demand helped temper their gains.
The won rose due to demand from local exporters, but its rise against the dollar was moderated by suspected intervention by South Korean authorities. The won, which hit a 14-month high versus the dollar last week, has risen roughly 0.7 percent in November, making it one of the best-performing emerging Asian currencies this month along with the Philippine peso.
Analysts say the South Korean won has been supported by inflows from overseas investors, adding these may persist in the near term. "We would expect that the won is going to continue to outperform," said Rob Ryan, a strategist for RBS in Singapore. The Thai baht was a tad firmer against the dollar at 30.68. The baht held firm even though there was some commercial selling of the Thai currency at the month-end, said a trader for a Japanese bank in Bangkok.
"We have seen some commercial interest to sell the baht since the start of the week," the trader said, adding that his bank sold the baht both on Friday and Thursday. "The ranges have been tight but it looks like trading volumes have been pretty robust both today and yesterday," he said, adding that the baht could head higher in the near term once such month-end selling is done. The Indian rupee rose 0.6 percent. The rupee gained a lift due to dollar-selling by institutional investors, but dollar bids from oil companies helped to temper the Indian currency's gains.
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