The South Korean won jumped on Friday on investor hopes of a stabilising global economy, but the Singapore dollar and Philippine peso were hurt by fears of possible dollar-buying after the surprise intervention by the Swiss central bank.
Other Asian currencies moved in tight ranges, torn between optimism about the global economy following a smaller-than-expected fall in US retail sales and fears that the Swiss central banks move to buy foreign currencies may trigger similar moves in Asia.
The won gained as much as 2 percent to 1,464.8 per dollar, helped by improved risk appetite due to renewed optimism about the global economy and on demand related to Philips Electronics sale of its stake in LG Display.
The won later pared its gains on importers dollar demand. The Philippine peso gapped up at opening and rose as high as 48.27 per dollar in early trade, but it later eased to 48.60 amid talk that some Asian central banks may buy dollars to weaken their currencies following the move by the Swiss central bank to buy foreign currencies.
"There is risk aversion again. I think its a spillover from Swiss franc," said a trader in Manila. The Swiss central bank cut interest rates on Thursday and said it was buying foreign currencies to fight deflation, driving up the euro and the dollar against the franc.
The Philippine central bank will maintain an easier monetary policy and allow the peso to move freely, deputy central bank governor Diwa Guinigundo said on Friday. The Singapore dollar dropped 0.7 percent to 1.5398 per US dollar amid fears of possible dollar-buying intervention.
"So those who were short on the US dollar are forced to buy back with stops at 1.5330, 1.5350 and 1.5370," said a trader in Singapore. Central banks in Taiwan and Thailand have been suspected of buying dollars in recent weeks to push down their currencies as local exporters cry for help amid the global downturn. Meanwhile, the Malaysian ringgit moved between 3.6751 and 3.6990 per dollar. "The Friday factor will discourage people from taking aggressive positions," said a trader in Kuala Lumpur.