South Korea's won hit a near one-year high on Tuesday as appetite for emerging Asian currencies improved after stronger-than-expected US corporate earnings and retail data slightly eased concerns about the recovery in the world's top economy. Further gains were, however, seen limited as Asia's economies remain under pressure because of weaker demand abroad, with investors awaiting China's third quarter gross domestic product growth data this week.
The won found support from exporters including shipbuilders, while the Taiwan dollar hit a five-month high peak on inflows from foreign financial institutions. The Philippine peso and the Malaysian ringgit rose as interbank speculators reduced dollar positions. "Market sentiment got skewed to risky assets including Asian currencies as solid US retail sales data and corporate earnings eased worries about a slowing global economy," said Jeong My-young, Samsung Futures research head in Seoul.
The won advanced to 1,106.0 per dollar, its strongest since October 31, 2011 on demand from exporters such as shipbuilders. Hyundai Heavy Industries Co said it had won a 3.5 trillion Korean won ($3.15 billion) order from Saudi Electricity Co to build a thermal power plant.
The South Korean currency is seen heading to 1,100, the previous high and a psychological resistance, as it strengthened past 1,109.4, the 61.8 percent Fibonacci retracement of its depreciation last year. The Taiwan dollar strengthened to 29.170 to the US dollar, its firmest since May 2 on inflows from foreign financial institutions after solid US data.
The Philippine peso gained as interbank speculators cut dollar holdings on improving risk appetite after stronger than expected earnings from Citigroup. "Any dollar's rally will be good chance to reinstate short positions and a break of 41.36 and 41.30 would signal further downside towards 41.00," said a European bank dealer in Manila. The ringgit rose against both the US dollar and the Singapore dollar.
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