EURO ZONE WORRIES WEIGH ON ASIAN FOREX, WON BREAKS THROUGH SUPPORT
DATE: 24/04/2012
Most emerging Asian currencies slid on Tuesday with the won breaking through a technical support line, as political uncertainty and weak data in Europe added to fears over its debt crisis, keeping investors away from risk assets.
Regional units are likely to stay weak as the euro zone is beset by political issues, which may put a brake on members' austerity measures.
Dutch Price Minister Mark Rutte on Monday tendered his government's resignation in a crisis over budget cuts, creating a political vacuum in one of the euro zone's most stable countries, a day after France started a presidential election.
The Netherlands, which Moody's says is facing a "credit negative" event due to the collapse of the Dutch governing coalition over austerity measures, is scheduled to sell up to 2.5 billion euros of two- and 25-year bonds later on Tuesday.
The euro zone's economic picture became gloomier, with data showing its business slump deepened at a far faster pace than expected in April.
BNP Paribas currency strategist Thio Chin Loo in Singapore said political uncertainties in Europe may pose a serious risk for emerging Asian currencies.
She recommended "buy the US dollar call for protection just in case Europe gets worse."
The South Korean won weakened past an appreciating trendline from 1,185.0 per dollar, the low of Dec. 19, which currently stands at 1,140.8.
If the won stays weaker than the trendline, it may head to 1,144.9, the low of April 12 and a critical support zone between 1,148-1,149 -- the 50 per cent Fibonacci retracement of its December-March strengthening.
But domestic exporters bought the won on dips for settlements, while investors remained cautious over possible dollar-selling intervention by the foreign exchange authorities.
Regional units are likely to stay weak as the euro zone is beset by political issues, which may put a brake on members' austerity measures.
Dutch Price Minister Mark Rutte on Monday tendered his government's resignation in a crisis over budget cuts, creating a political vacuum in one of the euro zone's most stable countries, a day after France started a presidential election.
The Netherlands, which Moody's says is facing a "credit negative" event due to the collapse of the Dutch governing coalition over austerity measures, is scheduled to sell up to 2.5 billion euros of two- and 25-year bonds later on Tuesday.
The euro zone's economic picture became gloomier, with data showing its business slump deepened at a far faster pace than expected in April.
BNP Paribas currency strategist Thio Chin Loo in Singapore said political uncertainties in Europe may pose a serious risk for emerging Asian currencies.
She recommended "buy the US dollar call for protection just in case Europe gets worse."
The South Korean won weakened past an appreciating trendline from 1,185.0 per dollar, the low of Dec. 19, which currently stands at 1,140.8.
If the won stays weaker than the trendline, it may head to 1,144.9, the low of April 12 and a critical support zone between 1,148-1,149 -- the 50 per cent Fibonacci retracement of its December-March strengthening.
But domestic exporters bought the won on dips for settlements, while investors remained cautious over possible dollar-selling intervention by the foreign exchange authorities.
POWERED BY: THE ECONOMIC NEWS
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