The Malaysian ringgit and the Singapore dollar fell on Tuesday, leading other regional currencies lower on worries the sagging global economy and slow progress on the European debt crisis may increase downward pressure on emerging Asian units. Some offshore funds and interbank speculators intensified selling emerging Asian currencies when the euro fell below $1.38 on concerns over how measures agreed among the eurozone leaders could be implemented.
"I prefer playing USD/Asia from the long side so long as EUR fails to trade back above 1.4000," said Jonathan Cavenagh, foreign exchange strategist for Westpac in Singapore, although there are "event risks" later this week such as policy meetings by major central banks including the Federal Reserve.
Dollar/ringgit rose as speculators covered short positions on risk-off environment and closed a gap at 3.1000 seen late last week. The pair may rise to 3,1270, around the 50 percent Fibonacci level of its falls in October, if it ends the day higher than the 38.2 percent retracement at 3.1067.
But some speculators sold dollar/ringgit after the pair filled the gap. US dollar/Singapore dollar may rise to 1.2700, around 38.2 percent retracement of its falls last month after rising above the pivotal level of 1.2570-1.2590. Leveraged accounts and interbank speculators bought the pair.
Dollar/rupiah gained as offshore funds including leveraged funds bought dollar/rupiah non-deliverable forwards (NDFs). But investors stay cautious over possible dollar-selling intervention by the central bank, especially if the rupiah tests 8,900 per dollar. The central bank has not been spotted in the market yet, dealers said.