July 23, 2012 / 7:40 AM / 5 years ago

EM ASIA FX-Spain bailout worries hit Asian FX

* Ringgit may head to 3.1742/dlr, 3.1816/dlr
    * Won down on offshore funds, 1,147/dlr-1,149 supported
    * Rupiah falls as foreigners sell Indonesian bonds

 (Adds text, update prices)
    By Jongwoo Cheon
    SINGAPORE, July 23 (Reuters) - Emerging Asian currencies
slid against the dollar on Monday as fears that Spain will need
a full sovereign bailout hit risk sentiment, and as investors
fretted about economic data from major economies later this
    The Malaysian ringgit fell 0.7 percent as investors took
profits from the best performing emerging Asian currency last
week, and the South Korean won weakened on selling by offshore
    The Indonesian rupiah also came under pressure as foreign
investors sold local bonds and local banks snapped up dollars,
although the central bank limited its downside, dealers said.
    Other riskier assets including Asia-Pacific stocks outside
Japan fell after Spanish bond yields on Friday
hit their highest levels since the euro was created, even as
euro zone finance ministers approved the terms of a loan of up
to 100 billion euros for Madrid to recapitalise its banks.
    Adding to the worries, a report in Germany's Der Spiegel
magazine suggested that the International Monetary Fund (IMF)
may not take part in any additional financing for Greece.
    The euro fell 1 percent against the yen to its lowest level
in more than 11-1/2 years. The single currency fell below
$1.2100 for the first time in more than two years.
    "Continued jitters out of the euro zone coupled with global
slowdown concerns may continue to keep Asian FX under downward
pressure," said Emmanuel Ng, foreign exchange strategist at OCBC
Bank in Singapore.
    Investors are keeping an eye on a slew of economic data such
as flash euro zone PMI and HSBC China manufacturing data on
Tuesday and U.S. second-quarter economic growth figures on
    "If China PMI tomorrow does not rise above 48 or 50, it is
gloomy for the rest of the world. China data is still so weak
even after so many stimulus including rate cuts," said a senior
Malaysian bank dealer in Kuala Lumpur.
    Interbank players suffered from stop-loss selling of the
ringgit and the Malaysian currency weakened past
3.1682, the 50 percent retracement of its appreciation earlier
this month.
    The local unit is seen having room to weaken further,
probably to 3.1742, the 61.8 percent retracement level, and the
next target would be the 76.4 percent retracement at 3.1816.
    The ringgit was the best performing emerging Asian currency
with a 1 percent gain against the dollar, Thomson Reuters data
    The won slid as offshore funds bought dollars,
prompting interbank players to cover short positions in the
    But the South Korean unit did not clear a technical support
area between 1,147-1,149 per dollar and market players were
reluctant to make bets in either ways, dealers said.
    The local currency currently has the daily Ichimoku kijun
line at 1,147.8. It has been closing stronger than the chart
level since mid-June.
    It also has the 61.8 percent Fibonacci retracement at
1,148.4 of it appreciation during early July.
    "The (dollar/won) market appeared a bit heavy. Players did
not expect dollar/won's gains to last long either, given the
recent rebound was short and little," said a local bank dealer
in Seoul.
    The rupiah shed on continuous dollar demand from
Indonesian domestic banks and as foreign banks and offshore
funds sold the country's bonds, dealers said.
    Foreign banks have not seen selling the local currency yet,
but market players expected their dollar demand, dealers added.
    Still, the central bank was spotted buying the rupiah
through state banks around 9,490 per dollar and 9,495 to prevent
it from weakening past 9,500, according to dealers.
    A Jakarta-based dealer said the rupiah is seen heading to
9,550 despite intervention by the central bank, given the global
risk-off sentiment.
    The Philippine peso slid as interbank players
covered short dollar positions and on weaker Manila stocks.
    But the peso found some relief as local banks bought it on
remittance inflows over the weekend, dealers said.
    The Singapore dollar eased on selling from macro
    The city-state's currency found relief as investors expected
inflows linked to beermaker stakes and from demand against the
    It also recovered some of initial losses after data showing
the city-state's inflation in June was faster than expected.
    Singapore' consumer price rose 5.3 percent in June from a
year earlier, beating market expectations of 5.2 percent.
  Change on the day at 0720 GMT
  Japan yen        77.99          78.50       +0.65
  Sing dlr        1.2592         1.2564       -0.22
  Taiwan dlr      30.029         29.995       -0.11
  Korean won     1146.03        1141.20       -0.42
  Baht             31.72          31.68       -0.13
  Peso             42.06          41.86       -0.48
  Rupiah         9470.00        9445.00       -0.26
  Rupee            55.85          55.32       -0.94
  Ringgit         3.1715         3.1505       -0.66
  Yuan            6.3883         6.3735       -0.23
  Change so far in 2012
  Currency    Latest bid  End prev year    Pct Move
  Japan yen        77.99          76.92       -1.37
  Sing dlr        1.2592         1.2969       +2.99
  Taiwan dlr      30.029         30.290       +0.87
  Korean won     1146.03        1151.80       +0.50
  Baht             31.72          31.55       -0.54
  Peso             42.06          43.84       +4.23
  Rupiah         9470.00        9060.00       -4.33
  Rupee            55.85          53.08       -4.95
  Ringgit         3.1715         3.1685       -0.09
  Yuan            6.3883         6.2940       -1.48
(Additional reporting by Yena Park in SEOUL and IFR Markets'
Catherine Tan; Editing by Kim Coghill)
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