Asian currencies broadly higher

Emerging Asian currencies rose broadly against the dollar and the Malaysian ringgit pulled up from a two-month low on Wednesday, as the dollar's recent short-covering rally showed signs of ebbing. The Malaysian ringgit stabilised after a sharp slide earlier in the week and pulled up from a two-month low against the dollar touched earlier on Wednesday.
The South Korean won inched higher, tracking gains in South Korean shares and the euro's rise against the dollar. There were doubts, however, about whether Asian currencies are ready to see a sustained rebound at this juncture. Emerging Asian currencies had been enjoying robust inflows to regional stocks and bonds in recent months based on stronger economic performance and tighter monetary policy amid ample global liquidity.
The dollar's rally against emerging Asian currencies this month has been driven by short-covering by leveraged accounts, said a Singapore-based trader. The South Korean won edged higher against the dollar, helped by a 1.6 percent rise in South Korean equities. The won pulled away from a one-month low of 1095.2 hit earlier this week, in the wake of the Bank of Korea's surprise decision last week to keep interest rates unchanged at 3.0 percent. The move stunned the market, which had been bracing for a rate hike. The dollar edged lower against the Singapore dollar. "The market feels toppish around 1.2450/60," said a trader for a European bank, adding that there were some dollar sellers around that level.