The Indian rupee fell on worries about the impact of proposed tax laws on fund inflows, leading slides among emerging Asian currencies as soft US economic data caused investors to cut bets on riskier assets before the end of the quarter. Regional units were also softer versus the yen on repatriation flows to Japan linked to the close of the country's financial year, while local importers bought dollars for payments.
"Asia ex-Japan currencies are increasingly pricing in the combined risk of slowdowns in the United States and China - and there is more to come," said Callum Henderson, global head of FX research with Standard Chartered Bank in Singapore. "The pace of returns for Asia ex-Japan FX has significantly slowed down since late February," said Suresh Kumar Ramanathan, regional rates and foreign exchange strategist at CIMB Investment Bank in Kuala Lumpur. Dollar/baht briefly broke through resistance around 30.860, the 38.2 percent Fibonacci retracement of its January-February slides.
If the pair ends the day above the retracement and breaches a 55-day moving average, which stands at 30.879, it may head to 30.980, the rebound high in early February. The next level would be 31.040-31.060, where a 100-day moving average and the 50 percent retracement sit. South Korean importers bought dollar/won and some interbank speculators added long positions amid worries about a global economic slowdown. Some dealers suspected that yen/won demand also supported dollar/won.