Won, ringgit lead Asian FX slide

The South Korean won and the Malaysian ringgit led slides among emerging Asian currencies on Thursday that stemmed from worries about the delay in nailing terms of a Greek rescue fund. Several EU sources said on Wednesday the euro zone is examining ways of holding back parts or even all of the bailout programme until after elections expected in Greece in April while still ensuring it avoids a disorderly default.
That underscored how far Europe is from resolving a debt crisis which could threaten the stability of the global financial system, hitting riskier assets such as Asian stocks and the euro. "A delay in the approval for a Greek bailout will lead to risk-off for a while. The switch to the dollar will be enhanced," said Saktiandi Supaat, head of FX Research at Maybank in Singapore. Bank of America Merrill Lynch said in a note that the Singapore dollar and the won are seen as vulnerable to investors' hedging their emerging Asia exposures. Still, some investors were looking to buy emerging Asian currencies on dips.
Earlier this year, buying emerging Asian currencies against the euro had been a popular trade among investors, given Asia's stronger economic and fiscal fundamentals. Dollar/won rose on demand from offshore funds and some local interbank speculators covered short-positions which they had built on exporters' supplies.
The pair is seen rising more, probably to a 120-day moving average of 1,135.8. On the over-the-counter-market, foreign investors on Wednesday bought more than a net 840 billion won ($748.98 million) worth of MSBs, which will mature in February 2014, according to sources. Offshore names on Monday took more than 910 billion won in one-year MSBs out of a total 1.1 trillion won awarded. US dollar/Singapore dollar briefly rose above 1.2693, the 38.2 percent retracement of its November-February decline. The pair rose to as high as 1.2710 as some dealers said stops at 1.2700 were triggered. If US dollar/Singapore dollar ends the day higher the 38.2 percent retracement, it may head to 1.2765-1.2780, a low on December 5 and the 50 percent retracement.