SINGAPORE: The won hit a two-week high on Thursday, leading gains among emerging Asian currencies, as a widely expected interest rate cut by South Korea's central bank caused investors to cover short positions.
Regional units broadly rose on expectations of continuous monetary policy stimulus from major central banks. The Philippine peso, the Malaysian ringgit and the Thai baht advanced on demand from offshore funds.
The won started the local trade weaker amid caution ahead of the central bank's rate decision.
The South Korean currency, however, turned firmer as the Bank of Korea slashed its policy rate by 25 basis points to 2.25 percent under the government pressure to prop up growth.
It extended gains to 1,022.1 per dollar, its strongest since July 30 as traders saw few signals of a further rate cut from the governor's comments.
Some offshore funds chased the won, prompting stop-loss dollar selling, traders said.
"It appears the market has judged that BoK will be on hold for some time," HSBC said in a client note.
"Beyond the immediate relief rally today, the KRW will likely receive more support from FX inflows towards the year-end," the bank said, adding it maintains the year-end forecast for the won's value to the dollar at 1,000.
Still, caution grew over possible intervention by the foreign exchange authorities to curb the won's appreciation.
The currency also has a chart resistance area around 1,021.0, the 61.8 percent Fibonacci retracement of its depreciation between July and August, analysts said. It also has a 55-day moving average at 1,021.9.
PHILIPPINE PESO
The peso advanced 0.6 percent to 43.685 per dollar, its strongest since Aug 6.
Offshore funds such as real money accounts and hedge funds bought the currency's non-deliverable forwards.
Local traders, however, took profit around 43.700 on sustained concerns over inflation.
Manila shares jumped 1.4 percent, outpacing other bourses in the region.
RINGGIT
The ringgit rose as much as 0.6 percent to 3.1745 per dollar, its strongest since July 25.
Offshore speculators bought the currency's NDFs.
Against the Singapore dollar, the Malaysian unit also advanced 0.4 percent to 2.5427, its highest since Nov. 1.
A foreign bank trader in Singapore said reserve managers and speculators are likely to buy the ringgit for carry on dips on easing geopolitical tensions and weakening expectations for a Fed rate hike.
Spot ringgit, however, pared some gains on dollar demand from local importers for payments amid caution over possible intervention by the central bank to stem its appreciation.
BAHT
The baht rose 0.6 percent to 31.82 per dollar, its strongest since July 29 on expectations of more foreign inflows to come.
On Wednesday, foreign investors bought a net 3.7 billion baht ($116.1 million) worth of stocks, their largest daily net buying since July 10.
Foreigners also bought a net 9 billion in bonds in the previous session, marking the first net daily purchase this month.
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