Won and peso fall

The South Korean won and the Philippine peso led declines in Asian currencies on Thursday, as weaker equities and a stronger dollar made traders close some short-term bets. Foreign investors have been selling stocks and bonds in countries where inflation risks are perceived to be high, weighing on the currencies of Indonesia and the Philippines and reflecting more selectiveness on where to invest in Asia.
For now, investors appear to be pulling money out of Asia. South Korea's central bank said in a research note that emerging countries have been timid in using currencies to ease inflationary pressures, although their governments have been making every effort to contain inflation with all tools available.
The won fell as investors covered dollar-short positions with a central bank official saying the Bank of Korea expects consumer inflation in January to accelerate from December. The won came under further pressure as foreign investors turned to net sellers of local stocks and from importers' dollar demand for settlements. Foreign investors sold a net 147.3 billion won worth of stocks with the benchmark KOSPI ending down 0.43 percent. They bought a net 3.2 billion won in the prior session. The Philippine peso slid as offshore investors sold the local currency on continuous fund outflows and as local players reduced dollar-short positions.
The Indonesian rupiah fell on continued outflows in the local stock and bond markets, although dealers said the central bank was spotted selling dollars to stem the rupiah's fall at 9,070 per dollar. Foreign investors are expected to continue to sell stocks and bonds in the country unless the country takes any action to contain inflation, traders said. They see heavy exodus from rupiah bonds if yields continue to climb. A Jakarta-based dealer said the rupiah has room to weaken to as soft as 9,100 per dollar in a near term.