The Philippine peso rose on Friday as investors covered short positions even as the central bank announced steps to curb the currency's upside, while continuing inflows lifted the Thai baht to a fresh 16-year high although some traders booked profits. The peso rose 0.4 percent to 41.07 per dollar as it received more support from an improving balance of payments and from demand linked to Thursday's stock inflows, traders said.
The country had a $452 million balance of payments surplus in March, compared with a $960 million deficit in February, central bank data showed. On Thursday, the Philippine central bank liberalised rules on foreign currency transactions, allowing residents to invest in property abroad and offshore funds.
But the measures are unlikely to have an immediate impact on the peso and they have been priced in because of previous and repeated comments by the central bank governor, traders and analysts said. Some analysts said the Philippines will see more inflows, given its strong economic growth and stable inflation. "We think these measures will take time before they start having visible impact on the peso," Credit Suisse said in a note.
Foreign investors also reduced bullish bets on the peso and bonds to book profits after a long-awaited ratings upgrade. In late March, Fitch Ratings raised the Philippines' credit rating to an investment grade. The South Korean won ended local trade up 0.7 percent against the dollar, outperforming regional peers, as exporters' demand caused some investors to cover short positions, traders said.
But its upside was limited as the yen slipped after Japanese Finance Minister Taro Aso said the Group of 20 has accepted the country's explanation that its aggressive monetary easing is aimed at beating deflation and not at competitively weakening the yen. Against the yen, the won gained 1.3 percent to 11.2512, its strongest since October 2008.
The baht rose as much as 0.3 percent to 28.63 per dollar, its strongest since 1997 on sustained inflows. But some of the gains were erased as investors took profits, seeing the best performing Asian currency this year as excessively bought. The 14-day dollar/baht's relative strength index stood at 25.1, still lower than the 30-threshold. An index reading below 30 indicates a pair is technically oversold.
The baht has gained 1.2 percent against the dollar this week, extending its 2013 appreciation to 6.8 percent, according to Thomson Reuters data. The Taiwan dollar advanced up to 0.4 percent to 29.788 against the greenback, its strongest since March 25, as local shares outperformed most Asian bourses with a 1.8 percent gain.