SEOUL, Oct 15: The South Korean won hit a near nine-month high on Tuesday as most emerging Asian currencies rose on growing hopes for a deal to reopen the U.S. Government and avert a possible debt default.
China’s yuan hit a record high for a second consecutive session, supporting regional peers.
The won rose as investors rushed to cover short positions and on sustained stock inflows, although caution over intervention capped its upside, traders said.
The Taiwan dollar gained on demand linked to foreign investors’ stock purchases.
The Thai baht also advanced, although most other Southeast Asian currencies have not benefited much yet with local financial markets closed for holidays.
Asian shares touched a near five-month peak as top U.S. senators signalled they could soon reach a bipartisan deal to resume the government operations and avoid a default despite concerns over further political bickering.
‘It is getting priced into markets that there will be no default,’ said Jeong My-young, Samsung Futures research head in Seoul. ‘The won is likely to test this year’s high and other Asian currencies may appreciate too.’
WON
The won rose as much as 0.4 percent to 1,067.0 per dollar, its strongest since Jan 24 on demand from offshore funds and stop-loss dollar selling, traders said.
Foreign investors extended a buying spree in Seoul’s main stock market to a 33rd consecutive session.
In technical analysis terms, the won has room to head to a minor resistance of 1,066.3, its low on Jan 2, and eventually this year’s high of 1,054.5, analysts said.
Still, apprehension grew over possible intervention by South Korea’s foreign exchange authorities to stem the won’s strength.
The won is technically seen overbought with the 14-day dollar/won’s relative strength index below the 30 threshold, which indicates the dollar is oversold.
TAIWAN DOLLAR
The Taiwan dollar rose on stock inflows and as strength in the won and the yuan provided more support.
Local importers bought the U.S. Dollar for payments below 29.400, limiting the island currency’s upside, traders said.
Investors also stayed wary of potential intervention by the central bank.
The Taiwan dollar is seen facing resistance at 29.300 to the greenback, traders added.
(agencies)
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