The South Korean won and the Singapore dollar eased on Wednesday as interbank speculators and custodian banks reduced exposure to emerging Asian currencies, with regional stocks turning weaker on persistent worries about the global economy and the eurozone's debt crisis.
Emerging Asian currencies had firmed earlier in the day as stocks rose on some hopes for further easing by the Federal Reserve to boost the ailing US economy. But regional units soon gave up their gains as Asian shares fell back into the red, indicating investors remained reluctant to buy riskier assets after heavy selling in recent weeks and ahead of a speech by Fed Chairman Ben Bernanke on Friday.
The won shed 0.4 percent as investors added dollar-long positions as local stocks fell. Earlier, the South Korean currency strengthened to as firm as 1,075.0 per dollar, but failed to keep the gain as Seoul shares slid. The Singapore dollar opened strongly, but turned weaker as interbank speculators covered US dollar-short positions. Investors are also wary of possible intervention by the central bank to cap the currency's strength, especially around 1.2030 per US dollar, dealers said. Interbank speculators also joined in the short-covering.
Earlier, the peso strengthened to as firm as 42.26 per dollar, slightly weaker than the 61.8 percent Fibonacci retracement of its depreciation earlier this month. The baht eased as importers bought dollars for month-end demand, while expectations for a central bank rate hike later in the day were fully priced into the Thai currency, dealers said.
Comments
Comments are closed.