Singapore dollar, ringgit tumble

Grim economic news pushed Singapore's currency to a near five-week low on Friday and most of its Asian peers also fell as US politicians appeared deadlocked over how to keep the economy from going over the so-called "fiscal cliff". Traders said regional authorities were unlikely to allow further gains in emerging Asian currencies unless there were signs of a compromise in Washington that would prevent aggressive fiscal tightening from taking effect early next year.
The Singapore dollar weakened past a technical support zone on selling from leveraged accounts and short-term investors after dismal third-quarter data. The South Korean won slid as offshore funds unloaded, although local exporters' continuous demand limited its losses.
The Malaysian ringgit also hit a near five-week low and the Philippine peso skidded on dollar-short covering against the both local units. "Asian FX looks at increasing risk of a downside correction. Broader asset class sentiment is not positive," said Jonathan Cavenagh, a senior FX strategist at Westpac in Singapore. Emerging Asian currencies lost ground on the week, led by the Philippine peso, this year's best performer in Asia.
The peso has lost 0.9 percent against the dollar, according to Thomson Reuters' data, as investors took profits amid caution over intervention by the central bank. Dollar demand from local corporates also put pressure on it. The ringgit fell 0.5 percent, while the won, the Singapore dollar, the Thai baht and the Indian rupee all weakened 0.4 percent.
The Singapore dollar hit 1.2294 to the greenback, its weakest since October 11, clearing a technical support zone of 1.2267-1.2268. The currency has a 55-day moving average at 1.2267 and the 61.8 percent Fibonacci retracement at 1.2268 of its appreciation from late September to mid-October. It had stayed firmer than the moving average since mid-July.
As the support area was cleared, the Singapore dollar may head to 1.2296, the 76.4 percent retracement. The next target would be 1.2340, its weakest level on September 26. The ringgit hit 3.0765 per dollar, its weakest since October 11, as interbank speculators rushed to cover dollar-short positions to stop losses. The currency may head to 3.0825, its weakest level on October 10. The next target would be around 3.0910-3.0920 with a 200-day moving average at 3.0917.