Emerging Asian currencies fell on Wednesday with the Singapore dollar hitting a seven-week low on increasing worries about the eurozone and the global economy, though some regional units were pulled higher by intervention. The central banks of India, Indonesia and Singapore were spotted selling dollars to bolster their currencies, dealers said.
Currency players were cautious as they weighed the possibility that more central banks will intervene. On Wednesday, regional currencies came under more pressure after a Belgian newspaper reported that the Franco-Belgium bailout of Dexia bank - the first casualty of the eurozone sovereign debt crisis - was going to be the subject of new talks.
Dollar/won hit a one-month high of 1,152.2 as foreign investors continued to sell Seoul shares. The pair breached the 50 percent Fibonacci retracement of its October slides. It is seen facing a resistance at its previous high of 1,153.2 as investors are wary of possible dollar-selling intervention by the foreign exchange authorities above 1,150. US dollar/Singapore dollar rose to 1.3074, the highest since October 6, but agent banks of the city-state's central bank were spotted selling the American currency.
Traders reckon the Monetary Authority of Singapore (MAS) is keen to cap rallies in the pair to below the 1.3100 level for the time being. However, risk aversion remains supportive of the pair with markets still keen to buy US dollars on dips, targeting 1.3200, the high on October 3-4. Dollar/rupiah rose on strong demand from foreign names while the central bank was spotted selling dollars, dealers said. Dollar/baht gained as offshore players bought the pair following a weaker Singapore dollar, and the pair is seen rising more. It may look better to buy the pair for possible breaching of 31.32 and moving to 32.00-32.10, analysts said.