July 2, 2012 / 7:51 AM / 5 years ago

EM ASIA FX-EU deal supports Asia FX, but profit-taking trims gains

* Ringgit up on interbank players, dlr short-covering limits
    * Won turns lower on importers; 200-day, 100-day MAs
resisted
    * Sing dlr dips as 50% Fibo level, 55-day MA capped

 (Adds details, updates prices)
    By Jongwoo Cheon
    SINGAPORE, July 2 (Reuters) - Most emerging Asian currencies
rose on Monday but pared initial gains, with the South Korean
won and the Indian rupee turning lower, on scepticism over the
latest European agreement aimed at easing the region's debt
crisis.
    The won initially hit a near-two month high, but local
importers' dollar demand around technical resistance levels
prompted short-covering in the greenback. Interbank speculators
took profits from gains in other regional units.
    Despite the firmer tone in riskier assets globally, many
investors were doubtful over how long the rally on last week's
European deal would last, noting the region's debt-laden and
slowing economies remained highly vulnerable to further shocks. 
    On Friday, euro zone leaders agreed to let their rescue fund
inject aid directly into stricken banks and intervene on bond
markets to support troubled members. They also took a step
towards banking union by pledging to create a single banking
supervisor, but details in both cases were sketchy
 
    Weak factory activity data from Asia also kept players from
building up large positions in regional currencies.
    A factory slump in Asia's two biggest exporters China and
Japan deepened in June, while the South Korean factory sector
shrank for the first time in five months and Taiwan
manufacturing activity contracted for the first time since
January.  
    "I would be cautious on Asian ex-Japan FX," said Saktiandi
Supaat, head of FX research at Maybank in Singapore.
    "Any euro zone announcement surprises tend to taper off. It
is a firefighting exercise. The smoldering fire under the ground
is still burning."
    Reflecting the concerns, the euro gave up some of its gains
from Friday, although Asian shares rose.
    
    RINGGIT
    Dollar/ringgit fell as interbank players sold the
pair on the European deal, but they covered short positions with
the euro's retreat.
    "I would like to go long dollar/Asia back. When the EU
euphoria dies, dollar/ringgit will rise toward 3.1800 and the
euro will be back to 1.25," a senior Malaysian bank dealer in
Kuala Lumpur.
    
    BAHT
    Dollar/baht slid, but short-covering limited its
downside, dealers said.
    Gold investors sold dollar late on Friday, boosting the
baht, according to dealers.
    "The baht looked overbought from Friday night, so we are
seeing some dollar rebound this morning," said a Bangkok-based
dealer.
    
    WON
    Dollar/won closed domestic trade slightly higher at 1,146.1
after sliding to as low as 1,140.0, the lowest since May 9.
    But the pair could not extend slide as it has technical
support around 1,142-1,143 with a 200-day moving average at
1,143.2 and a 100-day average at 1,141.9.
    Dollar/won has been closing above a 200-day moving average
since September last year and a 100-day average since May.
    Dollar demand linked to foreign investors' recent stock
sales also supported dollar/won, dealers said.
    The won was the best performing emerging Asian currency in
the previous two weeks with a 1.8 percent gain against the
dollar, according to Thomson Reuters data.
    "Its rise was seen a bit fast and it is not a good level to
chase. We need more exporters' demand to lift it further," said
a senior foreign bank dealer in Seoul.
    
    SINGAPORE DOLLAR
    U.S. dollar/Singapore dollar edged up as it has
support line at 1.2660 versus the greenback, the 50 percent
Fibonacci retracement of its April-June rise.
    This coincides with a 55-day moving average at 1.2659.
        
  CURRENCIES VS U.S. DOLLAR   
  Change on the day at 0720 GMT
  Japan yen        79.57          79.79       +0.28
  Sing dlr        1.2681         1.2675       -0.05
  Taiwan dlr      29.879         29.900       +0.07
  Korean won     1145.25        1145.40       +0.01
  Baht             31.54          31.75       +0.67
  Peso             42.00          42.12       +0.29
  Rupiah         9400.00        9385.00       -0.16
  Rupee            55.89          55.61       -0.51
  Ringgit         3.1670         3.1778       +0.34
  Yuan            6.3490         6.3541       +0.08
 
  Change so far in 2012
  Currency    Latest bid  End prev year    Pct Move
  Japan yen        79.57          76.92       -3.33
  Sing dlr        1.2681         1.2969       +2.27
  Taiwan dlr      29.879         30.290       +1.38
  Korean won     1145.25        1151.80       +0.57
  Baht             31.54          31.55       +0.03
  Peso             42.00          43.84       +4.38
  Rupiah         9400.00        9060.00       -3.62
  Rupee            55.89          53.08       -5.03
  Ringgit         3.1670         3.1685       +0.05
  Yuan            6.3490         6.2940       -0.87
 

(Additional reporting by Yena Park in SEOUL; Editing by Kim
Coghill)
 
   
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