SINGAPORE: Most emerging Asian currencies fell on Wednesday on concerns that slowing global growth will discourage further inflows to the region, with weak export data weighing heavily on the South Korean won and the Indonesian rupiah.
Chinese factory data eased worries about a hard landing in the world's second-largest economy, but South Korea reported a surprising 6.6 percent drop in exports and a decline in new export orders for the sixth consecutive month.
Indonesia posted the slowest export growth since late 2009, suggesting Asia remains vulnerable to sluggish global growth as the euro zone's debt crisis drags on.
The data came after US home prices and business activity in the US Midwest missed expectations and consumer confidence fell unexpectedly.
With worries about the global outlook back in focus, investors booked profits from January, which analysts said was the best month for Asian currencies since 2006.
The global economy seems to be searching for a bottom, and "this may well take another quarter or two," said Emmanuel Ng, foreign exchange strategist at OCBC in Singapore.
Ng said the data did not suggest a steeper slowdown in the global economy, which may be positive for riskier assets, but he doubted whether emerging Asian currencies could extend recent gains.
"It remains to be seen if the recent momentum of strong portfolio inflows (to Asia) can be sustained, while the euro zone problem remains very much an underlying risk that could erase the recent improvement in risk appetite," Ng said.
Greece still is struggling to convince foreign lenders it could bridge a funding shortfall with reforms, although a senior Greek banker said a debt swap deal to avoid a chaotic default is largely in place.
The rupee and some of its peers such as the Taiwan dollar were seen as excessively bought.
Some analysts said strength in emerging Asian currencies was largely due to position adjustments after they suffered a sell-off in late 2011 and added that they were likely to turn lower again eventually.
"I am firmly in the bearish camp... I will still look at higher USD/Asia from current levels," said Andy Ji, Asian currency strategist for Commonwealth Bank of Australia in Singapore.
WON
Dollar/won rose after the weak exports data and as importers bought the pair for settlements.
Some traders suspected dollar demand from Lone Star after a sale of a stake in Korea Exchange Bank to Hana Financial group.
But dollar/won pared some of early gains as offshore funds and local exporters such as shipbuilders sold it.
"Some players still prefer short positions as it is seen unlikely to touch 1,140 any time soon with any negative news," said a foreign bank dealer in Seoul.
Foreign investors were also net buyers of Seoul shares and the country's treasury bond futures, purchasing a combined net 735.1 billion won ($654.38 million) in the both markets.
BAHT
Dollar/baht rose above 31.00 on bids from local investors, while offshore funds limited its gains.
The pair extended gains as the euro fell further in late Asian trading.
RUPIAH
Dollar/rupiah gained as local players bought it, but hopes for inflows to the country's stock and bond markets capped the gains.
The pair also found support as the euro slid further.
TAIWAN DOLLAR
US dollar/Taiwan dollar turned higher as foreign banks covered short positions.
Taiwanese importers also bought it on dips and demand for non-delverable forwards-fixing supported it, dealers said.
Earlier, the pair hit a 4-1/2 month low of 29.495.
It is still seen oversold as its 14-day Relative Strength Index (RSI) stayed below the 30 threshold.
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