The South Korean won and Indonesian rupiah led Asian currencies up against the dollar on Monday as investors snapped up regional stocks on renewed optimism about a global economic recovery. Asian stocks jumped 2.6 percent as of 0650, lifting world shares to a 10-month high, after upbeat US housing data and optimistic comments from Federal Reserve Chairman Ben Bernanke spurred buying of riskier assets.
The stock rally weighed down the yen as investors moved into higher-yielding, higher-risk assets.
WON: The won jumped as much as 1 percent to 1,236.8 per dollar, a one-week high, as foreign investors continued to buy local stocks. "Risk appetite is coming back," said a Singapore-based dealer. Foreigners bought a net $624 million in Korean shares in the week ended August 23 even as several Asian markets witnessed fund outflows, according to data from Nomura.
Meanwhile, one-month dollar/won offshore non-deliverable forwards fell to 1,241, implying little change from the spot. One-month implied volatilities in the won eased slightly to 13.8 percent from Friday's close at 14.3 percent. "The spot won is not moving enough to justify the volatilities," said an option trader.
RUPIAH: The rupiah gained 0.4 percent to 9,800 per dollar as local stocks followed Friday's firmer tone on Wall Street. "The rupiah is following the US equity rally and the dollar is lower against other regional currencies," said a Jakarta-based trader.
The rupiah, supported by its yield advantages over other Asian currencies, remains the best performer in the region with a gain of 10 percent against the dollar so far this year. The three-month dollar/rupiah NDFs fall to 10,105, implying a 1.2 percent rupiah fall from the spot compared to 1 percent on Friday.
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