Most emerging Asian currencies advanced on Monday as appetite for risk improved on hopes of an aid deal for Greece later in the day, although gains were capped by an expectation that local authorities would intervene to prevent currencies from rising too fast. The Taiwan dollar and the South Korean won were among the gainers, helped also by exporters' month-end demand in the trade-reliant economies.
The Philippine peso also strengthened on stronger inflow of remittances and as the local stock market hit a record high. Still, the currencies failed to extend gains as investors were wary of intervention by local authorities concerned about the impact of stronger currencies on national exports.
Some dealers suspected that foreign exchange authorities in Manila and Seoul bought US dollars to stem appreciation in the won and the Philippine peso - the two best performing emerging Asian currencies this year. "Possible tighter monitoring of currencies by local regulators could curb Asian currencies gain in near term," said Frances Cheung, senior strategist at Credit Agricole CIB in Hong Kong.
The won advanced as some exporters bought it for settlements and interbank speculators expected more demand from such corporates in the last week of the month. The ringgit gained in thin trading amid hopes that euro zone finance ministers are likely to agree on a deal to get international lenders to release aid to Greece in time for debt repayments due mid-December.
But the Malaysian currency found a technical resistance line around 3.0500 per dollar with the kijun line on the daily Ichimoku chart at 3.0512. The ringgit has closed sessions weaker than the kijun line since November 8. A Malaysian bank dealer in Kuala Lumpur said he would not add bullish bets on the ringgit around 3.0500 due to the chart resistance, although he expects Europe to agree on aid for Greece.
The Philippine peso strengthened to 41.00 per dollar on remittances inflows, and with the country's stocks hitting a record high. A foreign bank dealer in Manila said the currency is unlikely to break 41.00 for now. The peso was the best performing emerging Asian currency last week with a 0.7 percent gain against the dollar, according to Thomson Reuters data. It has risen 6.9 percent so far this year, becoming the top performer among regional unit. The Singapore dollar eased as the city-state's industrial production in October rose 3.3 percent from the previous month, missing market expectations.
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