Asian currencies firmer

The South Korean won led Asian currencies higher on Wednesday, buoyed by reviving risk appetite as Barack Obama's win in the US presidential election ended uncertainty about who will lead the world's largest economy through financial turbulence.
The won gained 2 percent to 1,244.9 per dollar, although it is still down 26 percent this year even after the authorities spent a record amount of foreign exchange reserves in October to support the currency amid the financial turmoil.
But many analysts believe the worst for the won, hit by severe capital flight, is probably over following official measures to stimulate the economy and shore up banks, coupled with a recovery in global stocks markets.
"It seems that we have gone from a market that was attacking the won to one where the won is now range-bound," said Callum Henderson, chief global currency strategist at Standard Chartered Bank.
"They have achieved stabilisation for now - the bigger question is whether the won has fallen far enough to help the current account turn around," he added. The bank expects the won to strengthen to 1,200 per dollar by the end of March 2009 and rise to 1,150 by the end of June.
Westpac currency strategist Sean Callow said the worst may be past for the won, given signs of confidence returning to the global equity markets and easing money market borrowing costs, but added that the won's volatility would persist.
"Volatility is likely to still be too high to seriously consider directional NDF positions short term but 1,175-1,200 seems a plausible target on the one-month," he said in a note.
The Indian rupee hit a one-month high at 46.70 per dollar, buoyed by dollar inflows from corporates. The Philippine peso rose to a two-week high at 47.95 per dollar as local stocks rose. The Indonesian rupiah, however, fell to 10,925 per dollar. Still, traders said the unit was supported by rising stocks.
"11,000 looks toppish," said a trader in Jakarta. "I see some US dollar demand at 10,700-10,800. If the demand is not too big maybe we can see USD lower." Asian shares hit a three-week high and the dollar extended gains after Barack Obama became the next US president.