Won leads Asia forex gains

The South Korean won turned higher on Thursday, leading gains among emerging Asian currencies, as investors cut dollar holdings versus regional units after solid Chinese service sector data eased worries about a hard landing in the world's second-largest economy.
The won found more support as exporters' demand spurred stop-loss dollar selling, while the Taiwan dollar also recovered initial losses on foreign portfolio inflows despite worries about possible tax on stock profits. Market players squared short-positions in emerging Asian currencies before the Good Friday holiday when many regional markets are closed and the release of key US job data.
China's fast-growing services sector expanded again in March as business confidence hit an 11-month high, a HSBC survey earlier showed. "The data looked pretty good, enough to support emerging Asian currencies. Basically, we still have ample liquidity," said Jeong My-young, a senior currency strategist at Samsung Futures in Seoul.
Emerging Asian currencies have enjoyed inflows backed by a boost in liquidity from policy easing by major central banks. But they gave up some gains so far this year, especially in March, as markets expect smaller chances for another bond-buying programme by the Federal Reserve.
Regional currencies started Thursday on a slightly weaker tone after a poor Spanish bond auction reignited concerns about funding difficulties for weaker eurozone countries, while sentiment on risk assets was already hurt by fading hopes for more stimulus from the Fed.
On Wednesday, Spain's borrowing costs jumped as this week's tough budget failed to calm investors' nerves about the country's finances. "The euro risk, along with smaller chances for the Fed's QE3, may hurt Asia-ex Japan currencies more in the short term," said Enrico Tanuwidjaja, a currency strategist at Maybank in Singapore. Investors are keeping an eye on US March nonfarm payroll data due on Friday. The report from the US Labor Department is expected to show a gain of 203,000 jobs last month, including a rise in private payrolls of 218,000.
Dollar/won fell as supplies from exporters including shipbuilders, especially above 1,130, caused stop-loss selling by interbank players. Custodian banks joined offers with Seoul stocks turning higher. The pair started the day higher on renewed worries about the eurozone's debt problems.
US dollar/Taiwan dollar gave up earlier rises on exporters' offers and foreign portfolio inflows. Taiwanese exporters sold the pair around 29.530-29.540, dealers said. They expected more exporters to unload the US currency near 29.600. The pair started the day at a session high of 29.600 on worries about government discussions on a possible tax on stock profits.
The finance ministry's tax reform team will hold meetings on Thursday and Friday to discuss whether to levy a capital gains tax. "There is some evacuation from the Taiwan market," said a local bank dealer in Taipei. US dollar/Singapore dollar dipped as investors took profits before the Good Friday holiday.