* South Korean exporters add to support on won
* Won fails to break 1,100 per dlr with intervention spotted
* Taiwan dlr up on exporters, foreign investors; c.bank caps
(Adds text, updates prices)
By Jongwoo Cheon
SINGAPORE, April 30 (Reuters) - The South Korean won hit a
seven-week high on Tuesday, helped by demand from offshore funds
and leading gains among emerging Asian currencies as hopes of
more stimulus from central banks in the United States and Europe
bolstered risk appetite.
The Taiwan dollar touched a three-month peak
despite disappointing first quarter growth data, as foreign
financial institutions and local exporters bought the currency.
Regional stocks also gained on expectations that a slowing
economic recovery could spur the Federal Reserve and the
European Central Bank (ECB) to ease monetary policy further.
The Fed starts its two-day meeting later in the day and the
ECB is scheduled to hold a policy meeting on Thursday.
The won could benefit from their potential
stimulus more than other emerging Asian currency, given its poor
performance so far this year, although South Korea's foreign
exchange authorities are expected to curb appreciation, Samsung
Futures' research head Jeong My-young said.
"Quantitative easing, along with the Korean government's
stimulus and the won's losses means foreign investors can return
to Seoul stocks. Bond inflows will continue," said Jeong in
Seoul, referring to South Korea's stimulus spending plans.
"Once the won finds such momentum, intervention may not be a
big threat to further appreciation," she added.
The won has lost 2.8 percent against the dollar so far this
year, becoming the worst-performing emerging Asian currency.
That fall took place as foreign investors dumped a combined
net 5.8 trillion won ($5.2 billion) worth of stocks in Seoul's
main exchange so far this year, the Korea Exchange data
showed, on worries that a weaker yen will hurt South Korea's
export competitiveness.
On Tuesday, the South Korean currency rose 0.6 percent to
1,100.3 per dollar, its strongest since March 13, as exporters
provided further support, traders said.
Foreign investors bought a net 2.7 trillion won in the
treasury bond futures, their record daily purchase, the
Korea Exchange data showed. Seoul shares jumped with
foreigners returning to net stock buyers.
S.KOREA INTERVENTION
But the won failed to break through a technical and
psychological resistance of 1,100 as the foreign exchange
authorities were spotted intervening to stem its appreciation,
traders said.
That level is the 50 percent Fibonacci retracement of its
depreciation between January and April and previous lows stood
between 1,097 and 1,100.
Once the won breaks through 1,100, it may head to 1,090
technically with a current 120-day moving average at 1,090.5.
"It will be difficult to breach 1,100 as they (the Bank of
Korea) appeared determined to defend it with the yen/won
currently seen so low," said a senior foreign bank trader in
Seoul.
South Korea and Japan compete in overseas markets and the
yen's weakness is seen hurting South Korea's export
competitiveness.
Against the yen, the won gained 0.2 percent to
11.2630, compared with a near five-year high of 11.1468 hit on
Friday.
Credit Agricole recommended buying the won against the yen
for a target of 10.1670, using six-month non-deliverable
forwards as the instrument for the won side.
The bank expected Korea Treasury Bonds would continue to
attract foreign inflows, including from public sector
institutions looking to diversify their FX reserves and share
investors.
"Korean equity valuations are relatively low for a large
emerging market," it said in a note.
TAIWAN DOLLAR
The Taiwan dollar advanced 0.6 percent to 29.420 to the U.S.
dollar, its strongest since Jan. 28, on exporters' demand for
month-end settlements.
Foreign financial institutions also bought the island's
unit, traders said.
But the central bank was spotted buying U.S. dollar to cap
further appreciation, traders said, after the economy grew by a
well-below-forecast preliminary 1.54 percent in the first
quarter from a year earlier.
Importers also purchased the greenback for payments,
especially below 29.500.
BAHT
The Thai baht slid on sustained caution over
further measures to stem its appreciation and weaker bonds.
Finance Minister Kittirat Na Ranong has asked the central
bank to submit measures that could Asia's best-performing
currency in 2013 if it chooses not to cut interest rates, a
senior Finance Ministry official said on Monday.
Government bonds prices edged lower with the five-year bond
yield up to 2.96 percent and 10-year yield
to 3.40 percent.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0700 GMT
Currency Latest bid Previous day Pct Move
Japan yen 97.77 97.78 +0.01
Sing dlr 1.2336 1.2340 +0.03
Taiwan dlr 29.509 29.606 +0.33
Korean won 1101.52 1107.20 +0.52
Baht 29.35 29.31 -0.14
Peso 41.14 41.14 +0.01
Rupiah 9720.00 9720.00 +0.00
Rupee 54.24 54.23 -0.01
Ringgit 3.0340 3.0330 -0.03
*Yuan 6.1650 6.1650 +0.00
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 97.77 86.79 -11.23
Sing dlr 1.2336 1.2219 -0.95
Taiwan dlr 29.509 29.136 -1.26
Korean won 1101.52 1070.60 -2.81
Baht 29.35 30.61 +4.29
Peso 41.14 41.05 -0.21
Rupiah 9720.00 9630.00 -0.93
Rupee 54.24 54.99 +1.39
Ringgit 3.0340 3.0580 +0.79
Yuan 6.1650 6.2303 +1.06
* Financial markets in China are closed for a holiday.
($1 = 1107.3000 Korean won)
(Additional reporting by Roger Tung in TAIPEI; Editing by Eric
Meijer)
