The South Korean won and most of its peers fell on Wednesday as hedge funds reduced bets on emerging Asian units with investors rushing away from riskier assets after Greece's referendum call re-ignited doubts about Europe's bailout deal.
Some speculators reduced dollar holdings against emerging Asian currencies before the Federal Reserve's policy meeting later in the day, but renewed worries about the eurozone's debt crisis are expected to put sustained pressure on the regional units.
Dealers and analysts said some short-term investors appeared to slightly short emerging Asian currencies, while they have not seen big dollar demand from real money investors yet. "The Fed will try to solve US problems and QE3 may be discussed. That will push down the dollar. But a big question is how much dollar/Asia could fall amid worries about Greece," said a senior Asian bank dealer in Kuala Lumpur, referring to further quantitative easing.
The regional units this week gave up their rising momentum from last month on renewed worries about the eurozone. But some speculators are looking for buying those currencies, saying players already built up dollar-long positions to be cleared. Dollar/won rose as offshore funds and interbank speculators bought it on risk-off sentiment. But exporters did not miss the chance to sell it as the pair found resistance at 1,128-1,135. The pair has the 50 percent Fibonacci retracement at 1,128.6 of its rise between August and October and the other 50 percent retracement at 1,134.6 of its September-October rise. The resistance was major support before being broken last week.
Dollar/peso rose above a 55-day moving average of 43.025 earlier on short-covering. Philippines' financial markets were closed on Monday and Tuesday and the remittance inflows over the long holiday weekend were larger than on normal ones, they added.
US dollar/Singapore dollar gained on hedge funds' short-covering, briefly breaking through the 50 percent Fibonacci retracement at 1.2793 of its decline in October. But the pair turned lower on the euro's rebound. Euro/Singapore dollar is seen falling after failing to break the resistance at its 61.8 percent retracement of its April-September decline at 1.7700.