Won recovers, Singapore dollar up

The won cut its losses on Tuesday after a few regional central banks bought South Korean currency bonds for reserve diversification, while the Singapore dollar led a small bounce in other Asian currencies as shorter-term investors cut short positions.
Earlier, the regional currencies units continued to suffer from the risk-off environment on increased fears of a Greek debt default, with the won weakening past support level of 1,200 per dollar. The Singapore dollar also briefly broke through a 100-week moving average of 1.3188 per US dollar. During the past two years, the city-state's currency has not closed weaker than the 100-week moving average.
The Taiwan dollar also threatened to touch the long-term technical level. But intervention by Asian foreign exchange authorities prompted investors to add exposure in the regional units, seen as well supported. On Tuesday, several industry sources said the Thai and Kazakh central banks had been spotted buying South Korean won bonds in recent days. They also said a bond fund run by Franklin Templeton of the US purchased a large amount of the won bonds on Friday.
The won was the worst performing emerging Asian currencies in the third quarter, tumbling 9.4 percent against the dollar, the largest quarterly loss since the third quarter of 2008 during the global financial crisis. Technically, some of the units are still weaker than long-term support with the won and the ringgit away from 100-week moving averages.
Earlier, South Korean investment trust firms, offshore funds and local interbank speculators pushed the won to as weak as 1,208.2, the softest since July last year. The 14-day dollar/won relative strength index (RSI) rose to 73.1, indicating the pair was still in overbought territory. The Singapore dollar rose as foreign investment banks and local interbank speculators cleared US dollar-long positions.
The 14-day US dollar/Singapore dollar's RSI dipped to 72.5, but stayed above the 70 threshold, indicating the pair is still in overbought territory. Taiwan's central bank was spotted buying the Taiwan dollar, especially around 30.70 versus the greenback, near a 100-week moving average, while continuous stock outflows pushed the local currency to a 10-month low. The Taiwan dollar weakened to 30.722, the softest since December last year and slightly stronger than the average of 30.728. Foreign investors remained net sellers in Taiwan's stock market. The ringgit slightly rose as dealers said the central bank was spotted selling dollars around 3.2170. That caused interbank speculators to clear dollar-long positions.