Most emerging Asian currencies fell on Thursday as investors covered short positions on the dollar over growing scepticism on whether European leaders will be able to agree on a plan this week to ease the debt crisis. The South Korean won came under more pressure as demand for the dollar increased from local importers, while currency players ignored the central bank's decision to leave interest rates unchanged.
The Indonesian rupiah also showed muted reactions after Bank Indonesia held rates as expected. France and Germany will present a plan on Thursday to amend the EU treaty, aimed at restoring market confidence and stopping the crisis from spiralling out of control.
Dollar/won rose as importers and interbank speculators covered short positions amid scepticism over the European summit. Higher dollar/won non-deliverable forwards (NDFs) also supported the pair. One-month dollar/won NDF rose 0.4 percent to 1,133.50, supported by a trendline at 1,126.17. US dollar/Singapore dollar rose in subdued trading as the city-state's stocks underperformed other regional bourses.
The pair also has support by a trendline from November's low at 1.2811, while having resistance around 1.2912, the 38.2 percent Fibonacci retracement of its slide between late November and early December. Dollar/rupiah rose in extremely thin trading, although the central bank's selling intervention was spotted, dealers said. The central bank kept its benchmark overnight rate at 6.0 percent.
Comments
Comments are closed for this article.