SINGAPORE: Most emerging Asian currencies extended gains on Monday, enjoying capital inflows to the region after the Federal Reserve's aggressive policy stimulus last week, and the Indian rupee hit a four-month high on the government's reforms. The rupee has gained up to 1.2 percent to 53.66, the strongest since May 15, as the Indian government on Friday opened up the country's supermarket sector to foreign retailers and allowed more foreign investment in airlines and broadcasters, a day after sharply increasing the price of heavily-subsidized diesel. The South Korean won hit a six-and-a-half month high on stock inflows, and the Taiwan dollar touched its peak in more than four months on incoming funds. The Indonesian rupiah also hit a near seven-week high on bond inflows. "Asian currencies have room to rise further as the Fed did not only pump up money but also let investors buy time," said Jeong My-young, Samsung Futures' research head in Seoul. "Most risk currencies, especially the euro, looked technically overbought. But Asian FX may not fall much even though the euro may see corrections, as people will look for chances to buy the currencies against the euro," she added. Before this emerging Asian units had weakened versus the euro because the regional units did not reflect the rise in the euro on worries that a slowing global economy would keep hurting export-oriented Asia. Still, investors grew more cautious over possible intervention by local authorities to stem their currency gains.
The central banks of Taiwan and Philippine were spotted buying dollars, dealers said. Most regional units were also seen excessively bought, suggesting they may suffer from short-term corrections. The 14-day relative strength indices (RSI) of U.S. dollar/Singapore dollar, U.S. dollar/Taiwan dollar, dollar/rupee and dollar/baht stayed below the threshold 30, indicating those pairs are in oversold territory. The RSI of dollar/won, dollar/peso and dollar/rupiah stood above the threshold, but not far from that line. The Philippine peso and the Singapore dollar eased. TAIWAN DOLLAR
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