Won leads Asia FX losses

The South Korean won hit a near five-month low against the dollar on Monday, leading losses among emerging Asian currencies, as the greenback broadly rose after stronger-than-expected US jobs data. Regional units also eased after weekend data showed China's factory output and consumer spending were weaker than expected, indicating an uneven recovery in the world's No 2 economy.
The won slid on short-squeezes in the dollar with North Korea escalating its war of words against Seoul and Washington in response to a joint military drill of the South and the United States. But the South Korean won recovered much of its earlier decline on exporter demand. The Singapore dollar and the Malaysian ringgit both hit their lowest to the greenback in about six months. They also recouped earlier losses, tracking the won, traders said.
"Asian currencies may have more downside as the dollar's strength is unlikely to fade soon, given the healthy US economy. There are also some doubts over a China recovery story," said Jeong My-young, Samsung Futures' research head in Seoul. The won hit 1,102.8 per dollar, its weakest since October 25 as local interbank speculators and offshore funds covered short positions in the greenback to stop losses. The South Korean currency recovered some of its earlier losses as exporters bought the unit for settlements when it was weaker than 1,100, traders said.
Such demand caused some interbank players to dump dollar holdings to stop losses. Traders said the geopolitical tensions in the Korean peninsula have been priced in enough. The won has chart support at 1,104.6, the 38.2 percent Fibonacci retracement of its appreciation between May and January. Once the level is broken, it may head to 1,111.6, a 200-day moving average.
Still, investors hesitated to add further bullish bets on the won on broad dollar strength, traders said. "As the won weakened past 1,100, even briefly, it became difficult to carry over won long positions overnight," said a senior foreign bank trader in Seoul. The ringgit touched 3.1155 to the dollar, its weakest since September 7 as interbank speculators chased the US dollar.
Still, the Malaysian currency succeeded to stay firmer than a support at 3.1050 as the won and the Singapore dollar recovered their earlier slides, traders said. The ringgit is seen heading to 3.12 once the won and the Singapore dollar are weaker than 1,100 and 1.2500, respectively, a Malaysian bank trader in Kuala Lumpur said. The Singapore dollar weakened to 1.2510 to the US dollar, its softest since August 31 on selling from model funds and leverage accounts.