Emerging Asian currencies mostly strengthened on Tuesday, with the South Korean won hitting a 2-1/2-year high, on bets that monetary authorities will allow more currency appreciation to keep price pressures at bay. Hedge funds and other short-term investors pushed up the won and Philippine peso ahead of policy meetings later this week. The broadly weaker US dollar also pushed up currencies in the region.
The Taiwanese dollar broke through T$29 per dollar, a level that the island's central bank had defended for about a month, and advanced to a 13-year high. The Indonesian rupiah, meanwhile, posted its biggest 3-day gain in about eight months, as the central bank was not spotted buying dollars for intervention.
Dollar/won fell to as low as 1,102.5, the weakest since September 2008 on continuous hedge funds' selling and exporters' offers for settlements. The won rose 2.8 percent against the dollar last year, the worst performer among emerging Asian currencies.
Dollar/Taiwan dollar fell below the T$29 level in the first domestic trading session after the Lunar New Year holidays. Exporters' sell orders for the pair were also lined up at T$29, dealers said. Dollar/rupiah slid to as low as 8,910, the lowest since November 12 last year, down from the previous close of 8,950. The dollar/peso was bid as low as 43.42, the lowest since November 11, on flows from short-term players on the peso.
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