Hedge funds stepped up buying emerging Asian currencies on Wednesday after China's growth data alleviated worries about a slowing global economy while the South Korean won found further support from bond inflows. Asian currencies may also gain thanks to hawkish stances by central banks in Thailand and Philippines, which may attract investors seeking higher yields.
Worries about a slackening economic recovery in the world, along with concerns over the eurozone's debt crisis, reduced gains in emerging Asian currencies in the second quarter from the January-March period. The won led gains in its Asian peers, helped by bond inflows and exporters' demand for settlements.
Foreigners, including central banks of other emerging Asian countries, continued to buy South Korean bonds, officials at financial authorities and the local bond market said. Dollar/won's 23.6 percent Fibonacci retracement level of its rise between June and July is at 1,069.7.
The Philippine peso strengthened past a 55-day moving average on the euro's rebound and on expectations of the central bank's measures to fight inflation. The peso rose as much as 0.5 percent to 43.000 per dollar, breaching the moving average of 43.204. The baht slightly extended gains after the Bank of Thailand said interest rates are still on upward trend amid inflationary pressure and strong growth.