The South Korean won and the Singapore dollar slipped on Monday as short-term investors booked profits from emerging Asian currencies and reduced long positions on concerns over a lack of progress in Greek debt restructuring talks. Coalition parties in Athens must tell the European Union by Monday whether they will accept the painful terms of a new bailout deal worth 130 billion euros in order to avoid a disorderly default.
"Today's corrections (in emerging Asian currencies) are a reflection of the Greece issue still playing a big role in FX markets," said Saktiandi Supaat, head of FX Research at Maybank in Singapore. The 14-day Relative Strength Index of dollar/rupee, dollar/ringgit and US dollar/Taiwan dollar stayed below the 30 threshold, indicating those pairs are still in an oversold territory.
Short-term players booked profits from the currencies to square long positions in emerging Asian currencies. Dollar/won started local trade at a near three-month low of 1,114.8, but quickly turned higher. "Support around 1,110 would be stronger on mixed sentiment toward the euro zone, although dollar/won is seen staying under pressure. So, it would move around 1,120 for the time being," said a local bank dealer in Seoul.
The pair has a 200-day moving average at 1,109.5. US dollar/Singapore dollar rose on short-covering as investors were wary of intervention. Some investors showed selling interest above 1.2450, but the pair rose above the level on a weaker euro. Dollar/rupiah gained on sustained demand from local investors amid higher US dollar/ Singapore dollar. The pair may rise above 9,000 again on renewed worries about the euro zone. Dollar/Philippine peso dipped despite short-covering.
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