SINGAPORE: Emerging Asian currencies were mixed on Wednesday despite a higher euro as investors took profits from gains in some regional units against the single currency and on worries about sluggish global growth.
The Malaysian ringgit and the Philippine peso rose against the dollar on catch-up demand after local market holidays.
But most emerging Asian currencies fell against the euro as the South Korean won and the Singapore dollar touched their weakest versus the euro in about seven weeks. The won and the city-state's currency eased against the dollar, too.
Emerging Asian currencies have risen against the euro so far in 2012, with the Singapore dollar earlier this month hitting its strongest since December 2000, as investors sought assets in better economic and fiscal fundamentals.
Buying regional units against the euro has been more popular than purchasing them versus the dollar as the greenback has found support from investors seeking safe-haven assets.
"It looks difficult to chase Asian FX on sustained worries about global growth, while there is still some uncertainty on more policy stimulus, especially from the US," said Jeong My-young, Samsung Futures' research head in Seoul.
Strong US economic data last week reduced investors' expectations that the Federal Reserve may ease monetary policy more, putting pressure on emerging Asian currencies.
Investors are keeping an eye on the minutes of the Fed's last policy meeting later in the day and HSBC's Flash PMI for China due on Thursday.
Japan's exports slumped the most in six months in July as shipments to a debt-ridden Europe and a sluggish China tumbled, adding to concerns over global demand after a string of dire trade figures from Asia's export engine.
WON
The won slid both against the euro and the dollar as offshore funds covered short positions in the major currencies versus the South Korean unit, dealers said.
The local currency hit 1,415.70 to the euro, its weakest since July 5.
Against the dollar, the won has a technical resistance at 1,130.2, the tenkan line on the daily Ichimoku chart.
"There is little momentum to help the won see the 1,120 level, so investors had to cover short positions," said a South Korean bank dealer in Seoul.
SINGAPORE DOLLAR
The Singapore dollar eased despite hopes for inflows linked to a battle for the city-state's beer maker.
Singapore state investor Temasek Holdings has sold its stake of roughly 1.4 percent in Asia Pacific Breweries to Heineken, sources said late on Tuesday, potentially stopping the Dutch brewer's Thai rival from blocking the takeover.
The city-state's currency came under pressure as investors looked to cover short euro positions against the local unit, dealers said.
The Singapore dollar touched 1.5610 versus the euro, its weakest since July 3.
PHILIPPINE PESO
The Philippine peso rose against the dollar on remittance inflows after a long weekend and catch-up buying from interbank speculators.
Manila's financial markets were closed on Monday and Tuesday for holidays.
But the peso gave up initial gains as investors remained wary of the euro zone's debt crisis and its Asian peers cut earlier rises.
The Philippine currency also fell 0.4 percent to 52.849 against the euro, its softest since July 3.
"Traders were a bit cautious and took profits from their short dollar positions, although some looked to sell dollars on rallies," said a European bank dealer in Manila.
The peso is unlikely to strengthen past 42.20 per dollar until the end of the month unless there is more positive news from Europe this week, the dealer added.
RINGGIT
The ringgit gained as interbank speculators bought the local unit for catch-up plays after Malaysian financial markets were closed on Monday and Tuesday for holidays.
Trading was subdued as traders hesitated to add bets before the release of the minutes for the Fed's latest meeting and HSBC's Flash PMI.
Comments
Comments are closed.