Ringgit touches eight-month low

The Malaysian ringgit hit an eight-month low and the Taiwan dollar touched a four-month trough on Monday on heightened worries about global growth after data last week showed surprisingly weak US job growth in May. Most emerging Asian currencies were weaker, although the Singapore dollar showed some resilience and pulled away from a five-month low set last week.
The dollar rose to as high as 3.2050 versus the ringgit at one point, its highest since early October, according to Thomson Reuters data. Dollar buying by hedge funds and interbank traders helped drag the ringgit lower, traders said. Against the Taiwan dollar, the greenback climbed to its highest level since mid-January of 30.055.
The drop in the ringgit and Taiwan dollar came after data on Friday showed that US employers added a paltry 69,000 jobs to their payrolls last month, the least since May of last year. The weak reading has "very negative" implications for emerging Asian currencies, said Dariusz Kowalczyk, senior economist and strategist for Credit Agricole CIB in Hong Kong.
A recent Reuters survey underscored how market sentiment toward emerging Asian currencies has recently shifted. The poll on market positioning published on May 24 showed that market players turned bearish on currencies such as the Malaysian ringgit and the Taiwan dollar, and also increased their short positions in the South Korean won to the largest in more than three years.
The dollar may now be due for a pullback against emerging Asian currencies, said a trader for a major Japanese bank in Singapore. "Personally, I feel the dollar/Asians (are) looking like a sell now," the trader said, adding that the market may have reached a point where the dollar has become overbought against emerging Asian currencies.
The dollar dipped 0.2 percent versus the Singapore dollar to 1.2906, retreating from Friday's peak of 1.2972, its highest level against the Singapore currency since early January. The dollar faces resistance near 1.3000, which roughly coincides with the 76.4 percent retracement of the greenback's slide from October 2011 to April 2012. The Indonesian rupiah, the second-worst performing emerging Asian currency this year behind the Indian rupee according to Thomson Reuters data of indicative prices, gained some support due to dollar-selling intervention by Indonesia's central bank, and traders were wary about the possibility of more intervention.