The South Korean won edged up against the dollar on Friday on fund inflows, while the Singapore dollar hovered near a two-week high against the Malaysian ringgit after this week's rosy economic data. The US dollar stuck near 2-1/2-month lows against a basket of currencies, with the euro's outlook turning more positive after a short-covering rally lifted it through key resistance levels.
The dollar weakened broadly after reports that growth in US industrial production had slowed sharply, offsetting a bright start to the US earnings season earlier this week, which had briefly boosted markets. The won rose as much 0.6 percent to 1,195.7 per dollar but later erased most of the gains as local stocks turned lower and investors covered dollar-short positions.
"Whenever the won firms players cover (dollar) short positions, but won demand linked to foreigners' stock purchases keep supporting it. I see little momentum," said a foreign bank dealer. The won has gained 1.7 percent against the dollar so far this month, buoyed by a wave of foreign buying of local stocks.
Malaysian ringgit opened a tad firmer at 2.3280 to the Singapore dollar but then eased back to 2.3320, near a two-week low hit on Thursday. "Some players still look to higher SGD/MYR," said a trader in Kuala Lumpur. The Thai baht hovered around a one-month high of 32.21 per dollar hit on Thursday, buoyed by the euro's recent rebound and a retreating dollar.
"The euro may rise to its next resistance of $1.32 if it manages to consolidate above 1.29 today. That can set the stage for a 50-50 chance for the baht to break 32.20 next week. If that happens, it can firm further to 32.10 and 32.00 by the end of this month," a trader at a Thai bank said. The baht has gained 3.4 percent against the dollar this year.
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