The Korean won and the Malaysian ringgit recorded their biggest daily loss in seven weeks as deepening concerns that the eurozone crisis is spreading prompted hedge funds and interbank traders to unwind their holdings of emerging Asian currencies. "Risk is off the table. I'm actually surprised that we didn't see more of this yesterday as selling pressure was not as strong as I would have expected for Asia ex-Japan," said Sacha Tihanyi, senior currency strategist for Scotia Capital in Hong Kong.
The one-month dollar/ringgit NDF has gained a combined 1.3 percent on Monday and Tuesday and the one-month dollar/won NDF has risen 1 percent during the two sessions. The one-month dollar/rupiah NDF also has grown 0.4 percent. The won lost 0.8 against the dollar, the biggest daily percentage loss since May 23, according to Reuters' calculation, with daily dollar/won spot trading volume hitting a three-year high of $14.2 billion.
The volume compared with the daily average of $8.9 billion during the first six months of the year. It also has technical supports around 1,070 per dollar and 1,075. The won turned stronger against the euro, but it is seen facing resistance at a trend line of 1,480.
The ringgit fell 0.8 percent against the dollar, also the largest daily percentage loss since May 23, on dollar-short covering, especially after the euro slid below $1.40. Singapore dollar/ringgit also briefly broke through 2.4690, the highs of July 2009 and its next resistance is at 2.4760, the 2008 high. Dollar short squeezes pushed down the baht weaker than 55-day and 200-day moving averages but its downside is seen limited as the Thai unit is facing technical support and there remains hope the new government can ease political uncertainty.
Comments
Comments are closed for this article.