Won has best week in five months

The South Korean won reported the best week in five months, leading weekly gains in most of its Asian peers, as hopes for the Federal Reserve's further steps to revive the ailing US economy lifted regional stocks, while investors were reluctant to make big bets on Friday before a key job data.
--- Baht up on exporters, offshore
--- Ringgit gains on real money names
Investors already lowered expectations for the non-farm payrolls report for August before a Fed policy meeting later this month, which is expected to produce some sorts of additional easing. Weak job data is seen as cementing hopes for the Fed's further measures and providing support to emerging Asian currencies in the longer term, but the regional units are unlikely to be free from worries about a slowing global economy and the euro zone's debt crisis.
Asian currencies may fall in the short term if the payroll report indicates that the US economy is heading into a recession, dealers and analysts said. "I would buy dollar/Asia on dips," said Kenneth Kan, head of emerging markets forex trading at Credit Agricole Corporate and Investment Bank in Singapore, adding that emerging Asian currencies' fundamentals are strong but they are surrounded by "global headwinds". "We need another few weeks before things get more stable," he said.
Emerging Asian currencies, which have been pressured by persistent worries about a slackening US economy and the euro zone's fiscal problems, found relief this week after Federal Reserve Chairman Ben Bernanke hinted at additional steps to help US economy. That helped Asian bourses see foreign inflows. The won rose 1.8 percent against the dollar for the week, the largest gains since the week ended on April 3, according to Reuters data.
The Indian rupee, the worst performing emerging Asian currency so far this year, has gained 0.5 percent versus the greenback, its best weekly gains since the week ended on July 10. Still, investors have not regained full confidence in emerging Asian units, given uncertainties over the US economy and the euro zone's debt problems.
Some said the potential QE3 is not necessarily seen as a bullish factor for the regional currencies, given Asia's dependence on exports. "QE2 didn't really work. They printed $2.8 trillion in June 2010. But look at where we are now," said a Kuala Lumpur-based dealer, adding the Fed's further steps would not help the economy recover much. Interbank speculators covered dollar-short positions, which they built up on expectation of massive demand for the won linked to foreign investors' recent stock purchases.
The South Korean currency found support on bids linked to the foreign inflows and ahead of support around 1,066 and 1,067 per dollar. Foreign investors bought a combined net 1.56 trillion won ($1.47 billion) during the previous three sessions, with Thursday's purchases being the biggest in nearly two months. But on Friday, foreigners became net sellers of Seoul shares.
The baht rose against the dollar as exporters lined up to buy the Thai currency around 29.98 per dollar and 30.00. Offshore players and foreign banks in the country also bought the baht, dealers said. But gold importers sold the local currency, limiting its gains. The ringgit gained amid market talk that some real money accounts bought the Malaysian currency while trading stayed thin after holidays. Investors were also awaiting the US payroll data. The ringgit is seen having a resistance at 2.9591 per dollar, the 76.4 percent Fibonacci retracement of its weakening between late July and early August. Some interbank speculators sold the ringgit on rallies, dealers said.