Won falls, baht up

The South Korean won slid on Monday as news of North Korean leader Kim Jong-il's death spooked investors, giving a broad lift to the safe haven dollar and exacerbating weakness in Asian currencies. The won led declines in emerging Asian currencies, falling about 1.4 percent versus the dollar.
News of the North Korean leader's death dealt a further blow to already fragile sentiment, with market players worried about downside risks to risky assets as the eurozone's sovereign debt crisis drags on. "Succession plan will be the main focus and whether there will be a power struggle. Until this is solved, the KRW will be susceptible to weakening pressure, plus the spill-over effect on CNY, JPY will be pronounced," said Suresh Kumar Ramanathan, Regional Rates/FX Strategist for CIMB Investment Bank in Kuala Lumpur.
Dollar/won one-month implied volatility rose as news of North Korean leader Kim Jong-il's death triggered a sell-off in the South Korean won. Data available on Reuters shows the bid rate on dollar/won one-month implied volatility rose to as high as 15.0 percent at one point, the highest since late November. The one-month implied volatility later came off that high and last stood at 14.25 percent.
The bid rate on dollar/won one-month non-deliverable forwards (NDFs) rose to as high as 1,182.60, the highest in two months. After paring some of its gains, dollar/won one-month NDFs last stood at 1,174.00, up 1.2 percent on the day. The Thai baht eked out a modest gain on a day when most Asian currencies were steady to weaker.
The US dollar is likely to face resistance against the Singapore dollar roughly between 1.3130 and 1.3151, Axel Rudolph, senior technical analyst for Commerzbank, said in a recent research note. A downward trendline drawn off the greenback's October and November highs comes in right around 1.3130, while 1.3151 is the US dollar's November high against the Singapore dollar.