The Singapore dollar suffered its biggest daily loss in three months against the US dollar on Tuesday as Japan's nuclear crisis deepened and investors dumped riskier assets from currencies to equities and commodities. The South Korean won hit a fresh 2-1/2 month low against the dollar as market players rushed to cover dollar-short positions to stop losses.
On Monday, Asian currencies showed resilience as Japanese companies and investors appeared to hold off from quickly repatriating large sums in the wake of a massive earthquake and tsunami which hit the north-east of the country on Friday. Bank Indonesia, which investors have expected to allow the rupiah's appreciation to stem rising prices, was spotted selling dollars between 8,785 and 8,790, dealers said.
The Singapore dollar fell 0.7 percent against the US Dollar, the biggest daily percentage fall since December 15 when the local currency lost 1.2 percent, according to Reuters calculation. The Singapore dollar earlier fell on selling foreign banks including Japanese names, which traders reckoned the sales were linked to repatriation. The won suffered from dollar-short squeeze to weaken to as soft as 1,138.0 per dollar, the weakest since December 30 last year. The South Korean currency has room to fall more, probably to 1,145.2, the 61.8 pct Fibonacci retracement of its December-February fall.
The baht lost 0.6 percent against the dollar, the largest daily percentage slide since January 24. The rupiah turned lower on dollar-short covering after hitting a fresh four-year high, although Indonesia's central bank's intervention capped its falls. The rupiah may see a further correction as it has been overbought and investors may take profit from the recent strength in IDR, a Jakarta-based dealer said.
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