SINGAPORE: Emerging Asian currencies were mixed on Monday, as some optimism about regional inflows and Spain was countered by poor US corporate earnings that pushed down most Asian stock markets.
The South Korean won slid as foreign investors sold local stocks and treasury bond futures, but recovered most of the loss on exporters' demand for settlements.
The Singapore dollar rose slightly as investors bought in before it reached a chart support level, while exporters lifted the Taiwan dollar.
Spanish Prime Minister Mariano Rajoy's election victory in his home region of Galicia on Sunday was seen as removing a hurdle for Madrid to apply for international aid, in turn helping the euro rebound.
"With the euro situation looking more stable, investors are bringing their focus back to yield and growth opportunity, so we think Asia currencies will remain firm for a while," said Adam Gilmour, head of FX & derivatives sales at Citigroup in Singapore.
Gilmour said he prefers the won, the Indian rupee, the Malaysia ringgit and the Philippine peso .
Last week, most emerging Asian currencies rose amid signs that the global economy was stabilising, although some of the gains were pared by profit-taking on Friday.
On Monday, investors booked more profits from regional currencies, which tracking stock which weakened on lacklustre earnings from major US companies.
Players also remained cautious over possible intervention by Asian central banks to stem appreciation of their currencies.
The Hong Kong Monetary Authority stepped into the currency market on Saturday for the first time since December 2009 as capital inflows strengthened the Hong Kong dollar, causing it to hit the top end of its trading range.
Thailand is pushing ahead with measures to liberalise capital investments, such as allowing Thais to invest more easily in foreign securities, the central bank said on Monday. The country has been relaxing rules on outward capital investment for some years, one aim being to take upward pressure off the baht.
Last week, other authorities including central banks of Singapore, Taiwan and the Philippines were spotted buying dollars to slow strength in their currencies, dealers said.
WON
The won eased on weaker Seoul shares and amid political tensions in the Korean peninsula.
But the South Korean currency recovered most of initial losses on exporters' demand for settlements and as police banned activists from sending propaganda leaflets across the heavily militarised border into North Korea.
On Friday, the North said it would attack if Seoul allowed activists to drop anti-northern leaflets on its territory, in its most strident warning against its long-time foe for months. South Korea's defence minister told parliament its military would retaliate in the event of an attack.
SINGAPORE DOLLAR
The Singapore edged higher with a chart support at 1.2235 to the greenback, the tenkan line on the daily Ichimoku chart.
The city-state's currency has been closing stronger than the tenkan line since Oct. 11.
Still, some investors sold the local unit on rallies amid market talk that the central bank was spotted buying greenbacks below 1.2200, dealers said.
TAIWAN DOLLAR
The Taiwan dollar rose slightly on exporters' demand for settlements, especially around 29.250 to the US dollar and 29.270.
But traders hesitated to chase the island's unit on heightened caution over possible intervention by the central bank to stem the currency's strength and on weaker domestic stocks.
Last week, the central bank called on banks to refrain from shorting US dollar, indicating authorities are getting more serious about keeping the Taiwan dollar's appreciation in check, dealers said.
Still, it has not spotted buying US dollar yet, they added.
BAHT
The baht edged down in a tight range as gold prices fell to their lowest in more than a month.
Gold is popular among Thai investors, and rises in gold prices have a tendency to spur dollar-selling and vice versa for falls, traders said.
A Bangkok-based dealer said the Thai currency was finding resistance at 30.76 per dollar, its weakest level on Oct. 15.
If the resistance line is breached, the local unit may head to 30.80, said the dealer, who added that he expects gold prices to fall further.
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