Won hits two-month low

The South Korean won hit a near two-month closing low against the US dollar and the Taiwan dollar touched its lowest in over six weeks on Thursday, after a spike in oil prices triggered broad selling of emerging Asian currencies by foreign funds. Asian currencies broadly suffered as investors unwound short yen positions, with the won hitting a two-month low against the yen and the Taiwan dollar dropping to the lowest against the Japanese currency since December 7.
Brent crude futures jumped over 7.5 percent to its highest since August 2008, rising as high as $119.79 a barrel, driven by fears that political instability in North Africa and the Middle East could tighten supply. Many emerging Asian currencies are vulnerable to high oil prices, which accelerate inflation, analysts and dealers said. Foreign exchange authorities in the region may allow appreciation of their currencies or even intervene to stop their falls as a way to ease growing price pressures, they added.
Dollar/won rose above the 1,102-1,130 range held so far this year as offshore funds including hedge funds and macro real money funds kept dumping it and absorbing exporters' offers. Dollar/won ends domestic trade at 1,131.2, up 0.6 percent from its previous domestic close of 1,124.0 and highest domestic end since December 30 last year.
Yen/won also rose to as high as 13.8289, the highest since January 3 as foreign funds bought the cross-currency pair on worries about impact of higher oil prices on the won. Dollar/peso rose on risk aversion flows and local banks' demand amid worries about the impact on the Philippine economy from higher oil prices. Taiwan's central bank was spotted selling US dollar to check dollar/Taiwan dollar as the pair gained for a third consecutive session, rising as high as 29.796, the highest since January 11, dealers said.