The South Korean won and the Philippine peso led gains in Asian currencies on Wednesday as investors reduced dollar positions on a broad weakness in the greenback. Central banks in Taiwan and Malaysia were spotted buying dollars to cap gains in their currencies while caution over intervention by Seoul also prevented the won from strengthening past 1,110 per dollar.
Asian currencies were expected to stay firm as the dollar index hit a two-month low, breaking through the bottom of the daily ichimoku chart, dealers said. Currency investors are keeping an eye on a summit between China and the United States. Chinese President Hu Jintao arrived in the United States on Tuesday for a four-day state visit amid US complaints about Beijing's currency policies.
The won rose as one of the country's shipbuilders announced a big foreign order and market players cleared dollar-long positions. The peso gained 0.4 percent on a jump in the euro and with data showing the country's balance of payment last year hit a record high of $14.4 billion. Credit Agricole expects the peso to strengthen to 41.50 per dollar at the end of this year as worries about the country's inflation is groundless and on strong current account surplus. The Taiwan dollar rose 1.5 percent, but stayed weaker than T$29 per US dollar as the central bank placed many bids for the greenback. That made investors and exporters reluctant to sell the US dollars, dealers said.