Won up, Asian forex poised for weekly loss

The South Korean won rose on Friday as worries about Italy's political and economic crisis eased, improving investors' appetite for riskier assets, but persistent fears of a eurozone bond market meltdown set emerging Asian currencies up for a weekly loss.
Investors have turned bearish on most regional units in the last two weeks, becoming the most pessimistic on the Singapore dollar since April 2009, a Reuters poll showed. Among emerging Asian currencies, they were most bearish on the Indian rupee. The rupee has lost 2.3 percent against the dollar so far this week, becoming the worst performer in the region, according to Thomson Reuters data. The Singapore dollar, the second worst performer, has shed 2.1 percent.
"With European and Asian data continuing to worsen and the European debt crisis an ongoing threat to risk appetite we expect Asian currencies outside of the JPY to continue to drift lower into year-end," said Callum Henderson, global head of FX research with Standard Chartered Bank in Singapore.
Most emerging Asian currencies have slid this month as the eurozone's sovereign debt crisis deepened. On Friday, the regional units found some relief along with the euro after Italy managed to sell 1-year bills at yields of below 7 percent, the threshold that investors believe renders its debt burden unsustainable.
Dollar/won fell as investors cut long positions, which they had built up on foreign investors' continued stock market sales. Exporters also placed offers for settlements. But importers bought the pair on dips, dealers said. "We may see a little more rises (in the won), but I still think that it's right to sell the won on rallies," said a European bank dealer in Seoul.
Foreign investors sold Seoul shares for a third consecutive session, unloading a combined net 1.04 trillion Korean won ($916.9 million). US dollar/Taiwan dollar slid on stock inflows, while Taiwanese importers bought it. Taiwan's central bank was not spotted in the market, dealers said.
The pair is expected to trade between 29.800 and 30.300, dealers said. Dollar/ringgit edged down in thin liquidity, while investors were waiting for the central bank's policy decision later in the day. Malaysia's central bank is expected to leave interest rates unchanged at 3 percent.