Won, rupiah down

The South Korean won and the Indonesian rupiah led declines in emerging Asian currencies on Thursday as investors covered dollar-short positions ahead of a speech by Federal Reserve Chairman Ben Bernanke that could offer clues on whether it will offer fresh stimulus for the sputtering economy.
The slide came despite higher Asian stocks, and sparked some fears that regional currencies could see further losses if foreign investors start to cash in and bring funds back home. Emerging Asian currencies have suffered from position adjustments and profit-taking in recent weeks as growing worries about a global economic slowdown and the eurozone's fiscal crisis triggered heavy selling of riskier assets.
But regional units had found some relief this week as stocks rebounded on hopes that Bernanke may pledge more support for the economy at a speech on Friday. Few economists expect a major announcement from the Fed, however, and the lack of any concrete promises could drive global stocks lower, putting more pressure on emerging Asian currencies next week, analysts said.
The won weakened past a 120-day moving average of 1,083.4 per dollar as offshore hedge funds covered dollar-short positions, causing short squeezes among some local interbank speculators. The South Korean currency also finds firm support around 1,096, around its weakest level this month, as there is the 50.0 percent Fibonacci retracement level of its appreciation between March and August. It also has a 200-day moving average at 1,102.0. Dollar demand from Indonesian companies ahead of the month end and next week's holidays pushed dollar/rupiah above the daily Ichimoku cloud and to a near 2-mth high.
The rupiah has room to weaken further, probably to 8,586 per dollar, the 76.4 percent retracement of its strengthening between late June and early August Standard Chartered said it closes short US dollar/Taiwan dollar positions on equity outflows from Taiwan and worries about a global economic slowdown.