Most emerging Asian currencies turned higher on Wednesday after better-than-expected Chinese first-quarter growth data eased concerns over a sharp slowdown in the world's second-largest economy. China's economy grew 7.4 percent in the first quarter from a year earlier, still its slowest pace in 18 months but slightly exceeding market expectations of 7.3 percent.
In other Chinese data for March, industrial output slightly missed estimates but retail sales picked up. That improved sentiment towards emerging Asian assets with most regional currencies turning up and stocks also higher. The baht eased on catch-up plays after local financial markets were closed on Monday and Tuesday when its regional peers fell. But the Thai currency recovered some of its losses.
"We may see more inflows to emerging Asia as today's data eased China concerns a bit," said Yuna Park, a currency and bond analyst at Dongbu Securities in Seoul. "Unless Yellen gives a strong signal tonight that the Fed will raise rates this year, Asian currencies may rise further," Park added. Federal Reserve Chair Janet Yellen is scheduled to speak on monetary policy and the economic recovery in New York later in the day.
The South Korean won earlier fell as much as 0.4 percent to 1,044.7 per dollar as foreign banks bought dollars, which was seen as related to local companies' dividend payments to foreign shareholders, traders said. The better-than-expected Chinese growth data prompted some investors to cover short positions in the won as China is South Korea's largest export market. Domestic exporters also chased the won for settlements. Investors stayed wary of possible intervention by the foreign exchange authorities to stem the won's appreciation.