The South Korean won and Malaysian ringgit rose on Friday as oil pulled back from $120 a barrel and on views that regional central banks may stem currency falls, but traders said emerging market currencies remained vulnerable to further volatility in energy markets.
"There will still be uncertainty, so I won't turn bullish on Asian currencies," said Pin Ru Tan, emerging markets forex and rates strategist at the Royal Bank of Scotland in Singapore. Emerging Asian currencies fell not only against the dollar but also the yen and the euro as investors continued to seek the relative safety of developed markets and shifted away from emerging Asian markets.
Dollar/won fell as investors cleared long positions in the pair and exporters chased it for end-month settlements. "It was difficult to stay above 1,130 on exporters' deals. And I don't think the authorities would be happy with the pair's further gains given the oil price issue," said a foreign bank dealer in Seoul. Earlier, South Korea's vice finance minister said the inflation environment had grown more difficult from late last year both at home and abroad.
The central bank's dollar sales were seen around between 29.830 and 29.900 and estimated selling more than $100 million in the morning, reducing upward pressure on USD/TWD, dealers said. Earlier, dollar/Taiwan dollar rose as much as 0.5 pct to 29.905, the highest since January 7, on demand liked to foreign investors' continuous stock sales.
A foreign bank dealer in Taipei said he also heard that some clients were selling Taiwan dollar and buying the euro, although he was not sure if that was linked to an unwinding of euro-funded carry positions. Foreign investors have sold a net T$97.1 billion ($3.26 billion) so far this month, compared with total net purchases of T$99.3 billion in January.
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