The South Korean won hit a seven-week high and the Indian rupee rose on Tuesday, leading overall gains in Asian currencies, helped by persistent equity inflows. Foreign investors have been net buyers of Korean stocks for 10 consecutive days - the longest streak since October 2010 - and have purchased Indian shares for the past four days, showing resilience despite Japan's nuclear crisis and military conflict in Libya, among other risks that have materialised or resurfaced in the past month.
Ji recommended being overweight the won, Malaysia ringgit, Philippine peso and Indonesian rupiah. The won ended local trading around 1,110.0 per dollar, a level traders said monetary authorities had been defending since early February. It later rose to around 1,109.70. That caused investors to cut dollar-long positions and trip stoplosses, as investors had expected the authorities to prevent the won from strengthening past 1,110 per dollar, especially after they were spotted buying dollars on Friday to weaken it to levels around 1,114, dealers said.
The peso erased most of its earlier losses, tracking gains in its Asian peers and as dollar-shot covering petered out. Earlier, dollar/peso rose to as high as 43.60 on dollar demand from importers and as investors covered dollar-short positions. Expectations for further policy tightening by the central bank has supported the peso so far this year. However, the central bank was spotted buying dollars to defend 43.30 in March, dealers have said, triggering some dollar short covering.
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