Won leads Asian currencies down

The South Korean won led falls among Asian peers as investors cut risk positions amid a commodity rout and a weaker euro on Thursday with the Malaysian ringgit and the Thai baht weakening past major support levels. Emerging Asian currencies were hit as investors covered dollar-short positions on worries about potential hedge fund liquidations because of steep commodity drops.
Also prompting more covering was a surprisingly sharp decline in Australia's employment. Investors are expected to further reduce holdings in Asian currencies despite their bullish longer-term outlook that's backed by strong economics and policymakers' efforts to fight inflation, analysts and dealers said.
Emerging Asian currencies have experienced corrections on profit-taking, tracking falls in commodities and feeling an effect from persistent worries about Greece's debt problems. European Union finance ministers will meet next week to try to resolve Greek issues and ring-fence Portugal.
The Singapore dollar weakened to as soft as 1.2398 per the US dollar as interbank speculators covered short positions in the greenback. Model funds also sold the city-state currency, dealers said. Earlier, the city-state's currency found some support as real money accounts bought it on dips and on demand against the Australian dollar. The ringgit and the baht weakened past major support lines on dollar-short covers and are expected to fall more.
The Malaysian currency is seen heading to 3.0140, the 50 percent Fibonacci retracement level of the March-April strengthening trend, as it broke through 3.0000. The baht, which weakened past 30.17, the higher downtrend channel line of dollar/baht, has room to soften, probably to 30.32, the 38.2 percent Fibonnaci retracement level of January-April strengthening trend.