Major emerging Asian currencies gained on Monday, with some of them breaking key resistance levels, and traders expect them to rise more as strengthening hopes for a long-term solution to the Europe debt crisis push up risky assets such as stocks and commodities.
The South Korean won was the biggest gainer, adding more than 1.5 percent during the session. The won, the Philippine peso and the Thai baht broke through key resistance levels, setting up for further gains. Some Asian central banks may not allow their currencies to keep strengthening, given a slowing global economy. Dollar/won slid 1.5 percent to 1,139.0 during the local trade, the lowest since September 19 on stock inflows and exporters.
Earlier, the pair found support from South Korean importers around 1,147.3, the 38.2 percent retracement of its rise from 1,048.9 to 1,208.2 between August and October. But it broke through the support and another technical level at 1,144.0, the session high of Mar 17 and October 20 last year. Dollar/Philippine peso is expected to slide to 43.065 as it fell below key technical support levels on local banks' selling.
If dollar/peso ends the day lower than those levels, it may head to the 50 percent retracement of 43.065 and also a 100-day moving average of 42.993. Dollar/baht breached 30.68, the 38.2 percent retracement of its rises between late July and early October. It may head to the 50 percent retracement of 30.47. Dollar/ringgit slide to around 3.1057, the 38.2 percent retracement of its rise from 2.9320 to 3.2130 between late July and October. The pair is seen unlikely to break through the line unless the euro rises above 1.3900.