The South Korean won and the Indian rupee fell against the dollar on Wednesday, leading overall declines in Asian currencies as investors covered dollar-short positions amid the greenback's strength and on importers' deals. The won fell on importers' dollar demand and heightened caution over possible dollar-buying intervention after a senior official at the foreign exchange authority said the country will not use FX policy to curb inflation.
The remarks will not reverse the won's strengthening trend although the authorities may continue to slow down its gains, analysts and dealers said. The won recovered some of its earlier losses on bids from exporters, including shipbuilders, and as foreign investors continued to buy Seoul shares. Foreign investors bought a net 123.6 billion won worth of stocks on the main exchange after having purchased a net 848.6 billion won during the previous two consecutive sessions.
The Taiwan dollar rose over 3 percent against the US dollar but it cut gains on importers' dollar demand and as investors covered dollar-short positions. The Taiwan dollar rose to as firm as T$29.15 on early trading, compared with its previous close of T$30.201.