Won at three-week high

The South Korean won hit a three-week high on Monday despite the North's firing drills near a disputed sea border as most emerging Asian currencies rose to see quarterly gains with sustained hopes on China's economic stimulus. A North Korean artillery shell in the firing drill dropped in South Korean waters, media reported. After that, South Korean marine returned fire, the South's military said.
Investors may not see immediate threats from the exercise unless the two Koreas have actual military conflicts, traders and analysts said. Reflecting the views, the won rose as much as 0.4 percent to 1,065.4 per dollar, its strongest since March 11, on exporters demand for month-end and quarter-end settlements. It gave up some of earlier gains on South Korean importers' dollar demand. The won has a 120-day moving average at 1,065.2 and a 100-day average at 1,065.4.
The won's appreciation came as most emerging Asian currencies rose in the first quarter on increasing speculation about China's economic stimulus. In the first three months, the Indonesian rupiah and the Indian rupee led the gains among regional units as improving economic fundamentals of the countries attracted capital inflows. The rupiah jumped 7.1 percent against the dollar and the rupee advanced 3.2 percent. Thailand's baht has risen 1.4 percent as some investors covered short positions.
Investors were awaiting Federal Reserve Chair Janet Yellen's speech later in the day with the focus on whether she keeps her stance on US interest rates, which the market had interpreted as hawkish. The baht rose as month-end corporate dollar demand waned and bids for the yen to the Thai currency from Japanese companies for the end of 2013/14 fiscal year decreased. But investors hesitated to chase the baht further as the Thai Prime Minister is scheduled to defend herself later in the day before the before the National Anti-Corruption Commission against charges of dereliction of duty over a ruinously expensive rice-buying scheme.
Her supporters are hatching plans to thwart any move to dismiss her, with some leaders assembling what amount to militias. The Singapore dollar turned weaker on growing caution over possible intervention by the central bank to limit its strength. Earlier, the city-state's unit rose as much as 0.1 percent to 1.2568 to the US dollar, its strongest since December 18, on demand from real money funds. The Singapore dollar has a chart resistance area around 1.2560-1.2570, a cluster of previous lows which was a good support between late November and early December, analysts said.