Emerging Asian currencies on Friday shrugged off gains in other markets after Greece clinched a deal with lenders to plug a looming funding gap, with the South Korean won and the Malaysian ringgit suffering from dollar-short covering. "Markets have no strong convictions. European sovereign worries will linger for sure, and the Fed didn't offer much clarity in its policy path beyond this year," said Andy Ji, Asian currency strategist at Commonwealth Bank of Australia in Singapore.
Emerging Asian currencies have suffered from profit-taking in recent weeks as heightened concerns over the eurozone's debt crisis and a slowing global economy drove investors out of riskier assets. The won rose 0.7 percent against the dollar for the week as a central bank in central Asia bought it earlier this week to buy the country's bonds. It is the best performer among emerging Asian currencies with a 5.2 percent gain versus the greenback so far this year.
The Singapore dollar weakened past 1.2367 per US dollar, the 38.2 percent Fibonacci retracement level of its rises between May and June pressured by offers from US investment banks and European names. The baht threatened to weaken past 30.69 per dollar, the 61.8 percent, retracement of its strengthening trend between January and April, on gold investors' dollar demand to buy gold on dips.
If the level is clearly broken, the Thai currency may head to 30.73, the low of June 16. The Philippine peso rose on Fitch's upgrade of sovereign rating but gave up some of rises on worries about the Greek debt crisis. The peso also found resistances at 43.36 per dollar, around the 50 percent retracement level of its gains between late May and early June.
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