Emerging Asian currencies slid on Thursday as investors rushed into safe assets before year-end on expectations for further losses as the eurozone's debt crisis continues. Adding to worries about the global economy on Thursday was a private survey showing that China's factory output is expected to shrink in December.
"On charts for major currencies such as the euro and Australian dollar, critical levels have been broken. It is the turn of emerging Asian currencies now," said a senior dealer at an Asian bank in Kuala Lumpur. The dealer said most of the regional units are at risk of weakening past their support. Most emerging Asian currencies are poised to report losses for the year, thanks to the long and persisting worries about the eurozone's debt crisis.
The rupee has led the slide, having fallen 17.6 percent versus the dollar this year. Offshore funds and South Korean importers bought dollar/won , pushing the pair to near a technical resistance line at 1,164.8, the high on November 25, although its upside was capped by exporters' supplies. If the resistance is cleared, dollar/won may head to 1,180.4, the 76 percent Fibonacci retracement of its slide in October.
Dealers in Seoul and abroad suspected dollar-selling intervention by foreign exchange authorities, although the amount was not large, given subdued trading. Foreign sold a net 290.6 billion won ($251.33 million) in Seoul stocks while buying a net 274.5 billion won in treasury bond futures. Dollar/baht is expected to rise to 31.44 after it breached the 76.4 percent retracement of its slide between late November and early December. Dollar/Philippine peso gained but it gave up some of the rises as the central bank was spotted selling the pair. Investors reduced long positions after the release of data showing remittances in October rose to a new peak.