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EM ASIA FX-Won leads Asia FX gains, Taiwan dollar recovers
April 5, 2012 / 8:09 AM / 6 years ago

EM ASIA FX-Won leads Asia FX gains, Taiwan dollar recovers

* Exporters, stop-loss dollar selling lift won
    * Taiwan dollar sees foreign portfolio inflows despite tax
    * Sing dollar edges up on position squaring before holiday

 (Adds details, updates prices)	
    By Jongwoo Cheon	
    SINGAPORE, April 5 (Reuters) - The South Korean won turned
higher on Thursday, leading gains among emerging Asian
currencies, as investors cut dollar holdings versus regional
units after solid Chinese service sector data eased worries
about a hard landing in the world's second-largest economy.	
    The won found more support as exporters' demand spurred
stop-loss dollar selling, while the Taiwan dollar also recovered
initial losses on foreign portfolio inflows despite worries
about possible tax on stock profits.	
    Market players squared short-positions in emerging Asian
currencies before the Good Friday holiday when many regional
markets are closed and the release of key U.S. job data.	
    China's fast-growing services sector expanded again in March
as business confidence hit an 11-month high, a HSBC survey
earlier showed. 	
    "The data looked pretty good, enough to support emerging
Asian currencies. Basically, we still have ample liquidity,"
said Jeong My-young, a senior currency strategist at Samsung
Futures in Seoul.	
    "If we have more cheap cash, that may cause troubles such as
inflation. The existing liquidity is already seeking to be
parked," Jeong said.	
    Emerging Asian currencies have enjoyed inflows backed by a
boost in liquidity from policy easing by major central banks.	
    But they gave up some gains so far this year, especially in
March, as markets expect smaller chances for another bond-buying
programme by the Federal Reserve.	
    Regional currencies started Thursday on a slightly weaker
tone after a poor Spanish bond auction reignited concerns about
funding difficulties for weaker euro zone countries, while
sentiment on risk assets was already hurt by fading hopes for
more stimulus from the Fed.	
    On Wednesday, Spain's borrowing costs jumped as this week's
tough budget failed to calm investors' nerves about the
country's finances. 	
    "The euro risk, along with smaller chances for the Fed's
QE3, may hurt Asia-ex Japan currencies more in the short term,"
said Enrico Tanuwidjaja, a currency strategist at Maybank in
    "But our base case is for more sustained appreciation (in
Asia ex-Japan currencies) in the second half of this year along
with a U.S. recovery. Once the recovery sets in, the dollar will
weaken eventually. China's figure is not so bad either and a
hard landing can be avoided," Tanuwidjaja said.	
    Investors are keeping an eye on U.S. March nonfarm payroll
data due on Friday. The report from the U.S. Labor Department is
expected to show a gain of 203,000 jobs last month, including a
rise in private payrolls of 218,000. 	
    Dollar/won fell as supplies from exporters
including shipbuilders, especially above 1,130, caused stop-loss
selling by interbank players.	
    Custodian banks joined offers with Seoul stocks 
turning higher.	
    The pair started the day higher on renewed worries about the
euro zone's debt problems.	
    U.S. dollar/Taiwan dollar gave up earlier rises on
exporters' offers and foreign portfolio inflows.	
    Taiwanese exporters sold the pair around 29.530-29.540,
dealers said. They expected more exporters to unload the U.S.
currency near 29.600. 	
    The pair started the day at a session high of 29.600 on
worries about government discussions on a possible tax on stock
    The finance ministry's tax reform team will hold meetings on
Thursday and Friday to discuss whether to levy a capital gains
    "There is some evacuation from the Taiwan market," said a
local bank dealer in Taipei. "If the government cannot strike a
deal in discussions regarding tax on stock profits, USD/TWD can
go lower quickly."	
    U.S. dollar/Singapore dollar dipped as investors
took profits before the Good Friday holiday.	
    Traders also kept positions light ahead U.S. payrolls data.	
  Change on the day at 0715 GMT	
  Currency    Latest bid   Previous day    Pct Move
  Japan yen        82.30          82.46       +0.19
  Sing dlr        1.2569         1.2593       +0.19
  Taiwan dlr      29.480         29.480       +0.00
  Korean won     1127.30        1129.50       +0.20
  Baht             30.98          30.97       -0.05
 *Peso             42.80          42.80       +0.00
  Rupiah         9155.00        9135.00       -0.22
 *Rupee            51.11          51.06       -0.11
  Ringgit         3.0590         3.0650       +0.20
  Yuan            6.3088         6.2980       -0.17
  Change so far in 2012
  Currency    Latest bid  End prev year    Pct Move
  Japan yen        82.30          76.92       -6.54
  Sing dlr        1.2569         1.2969       +3.18
  Taiwan dlr      29.480         30.290       +2.75
  Korean won     1127.30        1151.80       +2.17
  Baht             30.98          31.55       +1.84
  Peso             42.80          43.84       +2.43
  Rupiah         9155.00        9060.00       -1.04
  Rupee            51.11          53.08       +3.85
  Ringgit         3.0590         3.1685       +3.58
  Yuan            6.3088         6.2940       -0.23
 * Financial markets in India and Philippines are closed for
 (Additional reporting by Yingchien Lee in TAIPEI and IFR
Markets' Catherine Tan; Editing by Jacqueline Wong)	
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