The South Korean won and Philippine peso hit 11-week highs on Tuesday as upbeat US factory data and European bank earnings buoyed risk-taking, but their gains were curtained by official intervention. The won gained as much as percent 1,159.9 per dollar, the highest since May 19, but later pared most gains as the authorities were spotted buying dollars, causing some investors to cover dollar-short positions.
Still, traders expect the won to rise further. Foreign investors bought a net 132.7 billion won worth of stocks on the main exchange, helping the benchmark KOSIP rise nearly 0.5 percent. Dollar/peso NDFs fell across the curve as hedge funds and other offshore investors were seen dumping dollars, particularly in short tenors.
The most liquid one-month dollar/peso NDFs hit a 2-1/2 month low at 45.32 from 45.39 late on Monday, while one-month onshore forwards fell to 45.365 from 45.496. The onshore/offshore spread narrowed to 45 points from 106 points on Monday. Spot peso gained 0.4 percent to 45.13 to the dollar, the highest in 11 weeks, but it later pulled back to 45.20 as traders spotted dollar-buying intervention by the central bank. The Thai baht gained slightly to 32.15 per dollar, with some traders seeing signs of Bank of Thailand bids for dollars at 32.18.