The Malaysian ringgit and the South Korean won led falls in their Asian peers on Thursday as investors reduced exposure to riskier currencies on growing signs of a global economic slowdown with weak China data and the US Federal Reserve's growth forecast cut.
So far this year, most emerging Asian currencies, except the Thai baht and the Indian rupee, have made gains despite the Fed's plan to end the second quantitative easing - so-called QE2. The Asian gains have been boosted by investors seeking assets in countries with stronger economic fundamentals than developed ones have.
The South Korean won was the best performer among them with a 5.4 percent rise against the dollar and the Taiwan dollar followed with a 5.0 percent gain. The baht, the worst performer, has lost 1.1 percent on worries about the country's political situations. The ringgit lost 0.3 percent against the dollar and weakened past 3.0290 per dollar, the 50 percent Fibonacci retracement line of its gains between late May and early June.
The Malaysian currency has room to weaken more, if it ends the day weaker than the level, probably to 3.0382, the 61.8 percent retracement. But exporters bought it on dips for settlements, providing some relief The Singapore dollar turned higher against the US dollar as it found support at around 1.2367, the 38.2 percent retracement level of its falls between May and June. The city-state's currency has another support level at 1.2381 per US dollar, the 55-day moving average.
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