Won leads gains in Asia

The South Korean won hit its highest level in more than five weeks on Wednesday, leading gains among emerging Asian currencies as investors pondered whether the US Federal Reserve will provide further stimulus to boost the world's largest economy. Regional currencies also found support from signs that Greek parties may be close to forming a coalition government.
Investors hesitated to increase positions in emerging Asian currencies in the face of a faltering global economy and the euro zone's continuing debt crisis. Asia's top companies are less upbeat on their business outlook in the second quarter than in the first quarter, the latest Thomson Reuters/INSEAD Asia Business Sentiment Survey showed.
Sacha Tihanyi, senior currency strategist for Scotia Capital in Hong Kong, said the Fed's bias would be to take action simply out of caution and to manage risk. Dollar/won slid to as low as 1,150.1, the lowest since May 14 and closed the local trade lower than a 55-day moving average, as South Korean exporters' supplies prompted stop-loss selling below 1,152.0. Offshore funds joined the offers, dealers said.
The pair had been closing domestic market above the average since early May. Dollar/won is seen as having room to slide further, probably to 1,148.3, the 61.8 percent Fibonacci retracement of its gains in May, as it is well below of the 50.0 percent retracement at 1,155.5. Dollar/peso fell on stop-loss selling and as some interbank players added short positions before the Fed, dealers say.
"The market is pricing in QE3 too much and would be setting itself up for a disappointment tomorrow," said a European bank dealer in Manila said. Market players are keeping an eye on possible inflows for San Miguel Corp's share issue, but the dealer said he has not heard of any inflows yet. The diversified Philippine conglomerate plans to sell up to $1.9 billion worth of preferred shares around September, its president said on June 14.
US dollar/Taiwan dollar fell slightly on some supplies from foreign financial investors, but market players hesitated to make big bets before the Fed meeting. Trading of the island's unit was also subdued because a typhoon forced businesses in some cities to close for the day. Dollar/rupiah's indicative price rose as local and foreign banks bought the pair. But the pair's dealt prices were higher than that with 9,485 was taken, according to dealers. Indonesia's central bank was spotted selling it at lower levels such as 9,425, dealers said.