Most Asian currencies slide

The rupee and the rupiah led gains among Asian peers on Friday after positive developments in India and Indonesia, but most emerging Asian currencies suffered a second week of losses and further slides are expected. Boosting the rupiah was Fitch Ratings' announcement on Thursday raising its Indonesia sovereign rating to investment grade for the first time in 14 years.
Emerging Asian currencies found more support from strong US data and as a Spanish bond auction on Thursday attracted solid demand. Still, investors stayed reluctant to chase the regional units amid persistent worries about the euro zone's debt crisis and possible repatriation from Asia, dealers and analysts said.
Some hedge funds showed interest in buying emerging Asian currencies, but they did not appear to add long positions in the units, an Asian bank dealer said. Most emerging Asian currencies are poised to see a second week of losses after a European summit last week failed to deliver solutions to the continent's sovereign debt problems and on worries about a slowing global economy.
Investors are cautious over possible intervention by Asian central banks. On Thursday, South Korean foreign exchange authorities and Philippine central bank were suspected selling dollars, dealers said. The Indonesian central bank has been unloading dollars to stabilise the rupiah. However, some Asian central banks might not actively intervene to boost their currencies as they will have to consider ways to support growth, dealers and analysts said.
Dollar/rupiah spot and its non-deliverable forwards (NDFs) fell after Fitch's rating upgrade. The upgrade is seen as attracting inflows to Indonesian bonds and stocks in the longer term, but worries about the euro zone and a slowing global economy are expected to keep many investors away from risky assets in the near term, analysts said.
Offshore funds sold dollar/won to take profits and stop losses in subdued trading, dealers said, as the pair has a strong resistance at 1,164.8. But South Korean importers supported the pair, prompting interbank speculators to cover short positions. Dollar/Philippine peso fell as interbank speculators reduced long positions and on expectations of remittance inflows.