Won dips in Asia FX

The South Korean won dipped on Monday as the yen's slide prompted investors to take profits from recent gains in emerging Asian currencies, though they pared initial losses on doubts over how much further the Japanese unit would fall for now. As the yen faltered the dollar was on track to take out the elusive 100 level after the Group of 20 countries late last week stopped short of criticising Japan's reflationary policies that have significantly weakened its currency.
That hurt the won - the currency of Japan's major export competitor - prompting investors to book profits from its gains of 1.1 percent to the dollar last week. But the South Korean currency recovered much of its earlier losses as the yen's slide paused. "Yen weakness is going to be capped in the medium term, and we shouldn't expect a 110 handle on a sustained basis in dollar/yen," said Sacha Tihanyi, senior currency strategist for Scotiabank in a note.
A weaker yen has pressured some emerging Asian currencies such as the won so far this year as it is seen hurting export rivals' price competitiveness in overseas markets and corporate earnings. The South Korean currency has lost 4.3 percent against the dollar so far this year, becoming the worst performing emerging Asian currency in 2013, according to Thomson Reuters data. That compared with a 13.0 percent drop in the yen.
On Monday, the won rose as much as 0.4 percent to 11.2004, its strongest since October 2008. The ringgit slid as investors took profits as the Chinese yuan dipped after Beijing fixed its mid-point weaker and on softer local bonds. Offshore funds covered dollar-short positions and local interbank speculators joined the move, traders said. The Malaysian currency is a favourite proxy currency among investors to bet on a stronger yuan, traders and analysts have said.
It strengthened to 3.0200 per dollar on April 17 when the yuan hit a record high. The ringgit's high on the day was a notch weaker than a three-month high of 3.0180 hit on April 10. The ringgit rose 0.2 percent last week, reporting its fifth consecutive weekly appreciation, according to Thomson Reuters data. The baht started the daily session firmer and hit 28.55 per dollar, Friday's high and its strongest since 1997. The peso edged lower in thin trade on dollar demand from local corporations and interbank speculators. Last week, the Philippine currency rose 0.5 percent, Thomson Reuters data showed, on stock inflows and as investors covered short positions after the central bank announced steps to curb the currency's upside.