Won, peso weaken

The South Korean won and the Philippine peso weakened on Tuesday as investors covered dollar-short positions, but continued interest from foreign investors in Asian shares checked declines in most regional currencies. Australia's central bank kept interest rates as expected and played down the impact of the disaster in Japan, easing expectations for further dollar-short covering against the emerging Asian currencies.
Investors are awaiting Federal Reserve minutes later in the day for more clues on the US central bank's policy outlook, but any further rise in the dollar may not hamper the bullish outlook for Asian currencies, dealers and analysts said. The peso has risen 1.0 percent per dollar so far this year, underperforming a 3.9 percent gain in the rupiah and a 1.9 percent rise in the ringgit.
The won snapped a five-session winning streak as investors covered dollar-short positions after the foreign exchange authorities were spotted buying dollars on Monday. Still, the won found support as exporters such as electronics makers chased it for settlements when it weakened past 1,090 per dollar with the 1,100 level, which the authorities had defended but allowed the won to cross last week, seen clearly broken. Foreign investors extended their buying streak in the Seoul stock market to a 15th consecutive session.
The peso slid as investors covered dollar-short positions after it failed to break through 43.30 per dollar, thwarted by the central bank's intervention to defend that level in the previous session and on dollar demand for fixing. Weaker-than-expected consumer inflation data also put pressure on the peso, dealers said. The central bank also said consumer prices remained well-behaved, although it will continue to monitor for second-round effects and shifts in inflation expectations. Another dealer said he would enter dollar-short positions around 43.50. The ringgit edged down as investors covered dollar-short positions as they don't want to test the central bank's determination to check the Malaysian currency's strength.