Won, Singapore dollar down

The South Korean won and the Singapore dollar slid on Tuesday as investors used concerns about slowing economies in Europe and China as an excuse to take profits and reduce exposure to riskier assets such as emerging Asian currencies. The Singapore dollar came under additional pressure as investors unwound carry trades funded by the euro, while the Indonesian rupiah continued to suffer from outflows, dealers said.
Emerging Asian currencies have surged in recent months as ample liquidity created by major central banks encouraged more investment flows to the region. But such inflows appear to be slowing or even reversing, leaving regional units susceptible to profit taking, dealers and analysts said.
The Australian central bank on Tuesday also left the door open for a policy easing if the economy weakens materially, adding to pressure on growth currencies. OCBC said in a note that the momentum of implied inflows into Asia continued to moderate, which could cause some players to scale back bullish Asian currency expectations.
"There is a certain sense of satiation for now and some reassessment may be underway in the short term. Round 1 is over," said Emmanuel Ng, foreign exchange strategist at OCBC in Singapore. US dollar/Singapore dollar rose on demand linked to euro/Singapore dollar short-covering, market players said.
US dollar/Singapore dollar also found support as interbank names scrambled to cover short positions. Macro funds sold the pair above 1.2600, but the pair is seen heading to 1.2625, near the February 27 high. Dollar/rupiah jumped on strong buying from offshore names, although the Indonesian central bank was spotted selling it, dealers said.
Dollar/won breached a Fibonacci resistance level as continuous demand from offshore funds triggered a short squeeze by local speculators. The pair closed the local trade at 1,122.9 after rising to as high as 1,124.2. It is seen rising more, probably to 1,124.5, or the 61.8 percent retracement of its February-March decline, as it cleared the 50.0 percent retracement at 1,122.1.
But it gave up some of earlier gains as shipbuilders and exporters sold it on rallies. Dollar/baht is expected to rise more after breaking through a 200-day moving average resistance, dealers said. If the pair ends the day higher than the average, which currently stands at 30.678, it is seen heading to 30.860-30.910.
It has the 38.2 percent Fibonacci retracement at 30.86 of its January-February slide. 30.91 was the session high on February 16. Last month, dollar/baht fell below a 200-day moving average on inflows to Thailand. Dollar/Philippine peso rose despite data showing inflation eased to a near 2-1/2 year low in February.
Philippine inflation slowed to 2.7 percent last month from a year ago, its lowest since September 2009, giving policymakers room to keep rates at a record low to bolster domestic demand. A European bank dealer in Manila said the pair is seen moving between 42.60 and 43.00 for the time being.