The Taiwan dollar rose for the first week in five and other Asian currencies also gained after the Federal Reserve kept interest rates unchanged, discouraging investors from buying dollar assets.
Asian currencies also streng-thened on easing concern China's plan to slow its economy will hamper growth in the region.
The Fed "was perhaps slightly more dovish than we expected," weakening the dollar against Asian currencies, said Simon Flint, a market strategist in Singapore at Bank of America Corp, the third-largest US bank by assets. The gain in Asian currencies "has been largely about US interest-rate expectations, which fell slightly at the beginning of the week."
The won had its second weekly gain in three, rising 0.2 percent to 1,171.25 against the dollar, according to Seoul Money Brokerage Services Ltd. The Taiwan dollar strengthened 0.2 percent to NT$33.314 this week, according to Taipei Forex Inc.
Chinese Prime Minister Wen Jiabao (
Investors abroad last week dumped Asian stocks and currencies on concern a slowing Chinese economy will hurt regional exports.
China is the biggest export market for South Korea and Taiwan, and demand from the country has helped drive exports higher in Asia.
Over the past two years, sales to China made up about 55 percent of Asia's export growth, Jim McCormick, Lehman's head of global-currency research in London, wrote in a report this week.
"The market is coming to terms with a more realistic assessment of the kind of effects" China's measures to slow its economy will have on Asia, Flint said. "People are becoming a little bit more comfortable with the idea that perhaps things aren't going to be as bad as we originally thought in China."
The Philippine peso rose 0.7 percent to 55.68 this week on rising speculation President Gloria Arroyo will win elections tomorrow, beating actor-turned-politician Fernando Poe Jr.
Arroyo had 37 percent support and Poe 31 percent in a poll of 1,800 people held April 26-29, Pulse Asia Inc said in a statement faxed this week. The margin of error was 2.4 percentage points.
Pulse Asia is one of the country's two biggest polling companies.
Arroyo's government oversaw increased exports and a smaller budget deficit last year. Poe drove Philippine 10-year dollar-denominated bonds lower in March when he said the nation should restructure its debt. He later backtracked on the statement.
"Overall positive sentiment on the back of increased confidence of Arroyo's re-election persisted," supporting the peso this week, Christy Tan, regional market strategist at Forecast Ltd in Singapore, wrote in a report.
The currency fell on Thursday and Friday after the government's national security adviser alleged at a press conference that opposition groups plan bombings and power outages to oust Arroyo. The president's rivals denied the claims.
A report on Thursday that showed the number of people filing applications for US unemployment benefits fell to the lowest since October 2000 helped fuel demand for the dollar against Asian currencies, Bank of America's Flint said.
Speculation some investors were stocking up on Asian currencies to buy regional equities also helped.
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