Most emerging Asian currencies dipped on Monday on worries that the last week's European summit deal does little to tackle the current debt crisis, while the Indian rupee extended losses after a surprising large contraction in industrial output.
On Friday, 26 of the 27 European Union leaders agreed to pursue stricter budget rules for the continent and also to have eurozone states and others provide up to 200 billion euros in bilateral loans to the International Monetary Fund (IMF) to help tackle the crisis. But the pact failed to ease worries about fiscal problems plaguing Italy and Spain, or broader concerns that the festering debt crisis could drag the global economy into recession or a prolonged period of lacklustre growth.
US dollar/Singapore dollar rose on a weaker euro but it has resistance around 1.2989-1.3009, the 61.8 percent and 76.4 percent Fibonacci retracement of Friday's move, for now. The pair is seen moving in a range between 1.2900-1.3010 and eventually testing 1.3060, the 76.4 percent retracement of its slide between late November and early December.
Dollar/won turned higher on demand from offshore hedge funds and bids linked to foreign investors' recent stock sales. Exporters continued to unload the pair on settlements, but they were not enough to keep it lower than the previous close, dealers said. Dollar/Philippine peso slid on remittance inflows and some speculators are looking to sell the pair further, seeing players have long positions to clear.
"The market is a bit relieved although the (EU) summit fell short of expectations. The market was already long before the summit," said a European bank dealer in Manila. The dealer said the pair may be supported around 43.50 for now but the pair may test 43.20 again in coming days.
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