SINGAPORE: Most emerging Asian currencies rose on Tuesday bolstered by short-covering, with the won up despite South Korea and Japan allowing a currency swap deal to lapse but the outlook for regional units was dampened by slowing global growth concerns.
The won was supported by expected demand linked to SK Telecom's sale of its stake in POSCO to foreigners and as exporters bought it for settlements.
The Taiwan dollar rose on domestic exporters' settlements, while remittance inflows lifted the Philippine peso , dealers said.
Emerging Asian currencies appreciated amid gains in regional shares, with China stocks jumping on hopes of more steps to support the market.
Still, lingering worries about a sluggish global economy, as well as uncertainty over Spain's bailout, kept the lid on the regional currencies.
"It could be short-term momentum as Chinese stocks rose more than 2 percent. The short-term momentum to play the positive story could dissipate quickly if future data is weak," said BNP Paribas currency strategist Thio Chin Loo in Singapore.
The International Monetary Fund cut its global growth forecast on Tuesday, for the second time since April, saying the global economic slowdown was worsening. It also warned US and European policymakers that failure to fix their economic ills would prolong the slump.
To brighten the dim economic picture, two of Asia's central banks -- the Bank of Korea and the Monetary Authority of Singapore -- are expected to ease monetary policy this week.
WON
Investors mostly ignored a decision by Japan and South Korea not to renew a $57 billion currency swap facility designed to protect their economies against financial crisis.
"The end of the swap deal means a cut in spare money in a contingency plan. But given the current foreign currency liquidity situation, Korea will not face a big problem even without the money," said Jeong My-young, research head of Samsung Futures in Seoul.
The won gained as traders bought on expectations of demand for the currency from foreign investors, who bought POSCO's stake from SK Telecom.
On Monday, SK Telecom sold half of its 2.85 percent share in POSCO for 440 billion won ($395.68 million), an SK Telecom spokeswoman said, adding that foreign investors were buyers.
South Korean exporters also purchased the won for settlements.
Still, domestic importers also chased dollars around 1,110 per dollar, limiting the local currency's upside, dealers said.
"Importers set up a firm defense at 1,110 (per dollar)," said a senior foreign bank dealer in Seoul.
PHILIPPINE PESO
The Philippine peso rose on offshore Filipino workers' remittances and expectations of inflows to the country on better economic fundamentals.
Investors were cautious over possible intervention on market talk of the central bank's dollar bids at 41.36 per dollar.
But traders were looking to buy the peso, on anticipation of more incoming money from migrants.
"Market bias has been to sell the dollar's rallies because of remittances," said a foreign bank dealer in Manila.
TAIWAN DOLLAR
The Taiwan dollar rose as the island's exporters sold US dollars around 29.300 for settlements in subdued trading.
But domestic importers bought the US dollar near 29.270, limiting the local unit's upside, dealers said.
Interbank speculators hesitated to build up positions in either direction as the central bank was on Monday spotted buying and selling US dollars, dealers said.
The two-way intervention indicated the central bank may want the Taiwan dollar to move between 29.200 and 29.400, they added.
SINGAPORE DOLLAR
The Singapore dollar rose both against the US dollar and the ringgit.
Investors covered short positions in the city-state's currency to the neighboring local unit, dealers said.
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