SINGAPORE: The Singapore dollar and the Malaysian ringgit had their worst week in nearly six months as investors on Friday continued to take profits from emerging Asian currencies and other riskier assets amid plunging commodity prices and before US job data.
The Singapore dollar bucked overall falls in the regional currencies in the last session as speculators took advantage of slides in its peers to buy ahead of Saturday's general election.
Exporters also bought regional units for settlements on dips, providing some support.
Still, emerging Asian currencies are expected to stay weak in near term and investors are unlikely to chase them more for now despite their bright outlook in the longer term, as commodity markets are poised for a further near-term drop, analysts and dealers said.
If US payroll figures due later in the day indicates a slowdown in the world's top economy and drags commodity prices more, that will prompt investors to liquidate more long positions in Asian currencies, they added.
"Asia holds the line a bit better today and bargain hunters are in focusing on SGD and THB in particular. Still, the fact that the rest of the Asian currencies are still sitting on daily losses means that it is too early to say that risk aversion has run its course," said Sacha Tihanyi, a senior currency strategist at Scotia Capital in Hong Kong.
"The non farm data in the US today will be a key event as far as this is concerned. A better than expected print will hopefully do wonders in ridding the market of its current doom and gloom."
Investors had chased emerging Asian currencies on stronger economic growth and policymakers' anti-inflation efforts as well as amid ample liquidity.
They maintain a bullish views on them in medium or longer terms but are reducing their bets given positions and amid corrections in other riskier assets such as commodities.
"Better economic pictures and liquidity have been fully reflected in Asian currencies. It looks difficult to make one-way bets for the time being," said Jeong My-young, a currency strategist in Seoul.
With market players taking profits from Asian currencies, the Singapore dollar shed 0.95 percent for the week and the ringgit lost 1.23 percent, their largest weekly percentage loss since the week ended on November 28 last year.
WON
The won slid as much as 1.5 percent against the dollar and filled a gap seen late April.
The South Korean currency recovered some losses as exporters chased it for settlements as the unit is facing a resistance level of 1,094.5 per dollar, the low of April 19.
Still, market players are reluctant to buy it, dealers said.
"Bids for the won are seen shrinking much in line with commodity prices. Commodity may show some rebound, but their demand will shrink much," said a foreign bank dealer in Seoul.
Investors are keeping an eye on possible cabinet reshuffle in which local media speculated Finance Minister Yoon Jeung-hyun would be replaced.
BAHT
The baht may weaken to 30.32 per dollar, the 38.2 percent Fibonacci retracement level of Jan-May strengthening trend if the pair clearly breaks through a resistance of 30.17, the higher downtrend channel line of dollar/baht.
A Bangkok-based dealer said the baht has more room to slide although some investors are still looking to join exporters in buying the Thai currency.
SINGAPORE DOLLAR
Speculators bought the Singapore dollar before Saturday's general election and as a technical indicator showed the city-state currency was most sold in nearly two months.
"Whatever the outcome unless extremely surprising, which I doubt, would still means a gradual appreciation of SGD," said a US bank dealer in Singapore, adding speculator names were taking opportunity to buy into corrections in emerging Asian currencies.
US dollar/Singapore dollar's 14-day Relative Strength Index rose to 47.21 on Thursday, the highest since Mar 18, indicating the pair is mostly bought although it is not overbought yet.
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