Won leads Asia FX slide on China worries; Baht at 4-year low

Reuters - The South Korean won hit a near six-week low on Monday, leading losses among emerging Asian currencies, on worries about a slowdown in China at a time when the U.S. Federal Reserve is expected to keep trimming monetary stimulus.

The won came under pressure from offshore fund supplies and dollar demand linked to foreigners' recent stock selling, traders said.

Goldman Sachs said in a research note it expects the Bank of Korea to cut its policy rate in the near term, changing its view of rates being on hold in the first half of the year before a cycle of higher rates begins in late 2014.

The Thai baht hit another four-year low on dollar bids from custodian banks and offshore funds' selling amid intensifying political tensions.

The Indonesian rupiah fell on corporate dollar demand.

Asian shares tumbled to a two-week low as a sharp slowdown in China's service sector in December boosted worries about the pace of recovery in the world's second-largest economy.

The dollar stayed around a four-week high on an upbeat outlook for the U.S. economy from Federal Reserve Chairman Ben Bernanke that fanned expectations of a faster cut in stimulus by the U.S. central bank.

"The USD outlook still looks a bit better against Asian currencies with external account risks either across current account, portfolio accounts, or both," Scotiabank said in a client note.

WON
The won slid as much as 0.9 percent to 1,064.8 per dollar, its weakest since Nov. 28. The South Korean unit also lost 1.4 percent to 10.2013 versus the yen, its softest since Dec. 23.
Local interbank speculators cut bullish bets on offshore funds' selling, while exporters stayed away, traders said. Still, the won is seen facing a chart support around previous lows of 1,064-1,065 to the dollar, analysts said.

BAHT
The baht lost as much as 0.3 percent to 33.10 per dollar, its weakest since February 2010. "Dollar/baht will rise further as the political situation is still not looking good," said a Thai bank trader in Bangkok.
The trader said the pair's upside may be limited, adding "the big guy is there, I think," when asked if the central bank was spotted intervening. Anti-government protesters plan to shut down Bangkok this
week to sabotage an election while the government's supporters have vowed to stage massive counter rallies in the country's provinces.
Thai stocks fell 1.4 percent, underperforming most regional shares. The Thai currency is expected to test a chart support line at 33.34, the 61.8 percent Fibonacci retracement level of its appreciation between 2009 and 2013, analysts said.

RUPIAH
The rupiah fell on corporate dollar demand, while central bank intervention limited its slide, traders said. Bank Indonesia was spotted providing dollar liquidity around the session low of 12,235 to the greenback to support the ailing unit, traders said. The official Jakarta Interbank Spot Dollar Rate (JISDOR), which the central bank launched in May 2013 in an effort to manage exchange rate fluctuations, was fixed at 12,230 rupiah per dollar, compared with Friday's 12,226.

The Indonesian currency weakened in non-deliverable forward (NDF) markets with its one-month NDF at a near five-year low to the dollar.

CURRENCIES VS U.S. DOLLAR
Change on the day at 0440 GMT

Currency Latest bid Previous day Pct Move

Japan yen 104.35 104.86 +0.49

Sing dlr 1.2694 1.2671 -0.18

Taiwan dlr 29.996 30.039 +0.14

Korean won 1064.30 1055.20 -0.86

Baht 33.10 33.00 -0.30

Peso 44.75 44.65 -0.21

Rupiah 12235.00 12160.00 -0.61

Rupee 62.42 62.16 -0.42

Ringgit 3.2880 3.2865 -0.05

Yuan 6.0529 6.0515 -0.02

Change so far in 2014

Currency Latest bid End prev year Pct Move

Japan yen 104.35 105.28 +0.89

Sing dlr 1.2694 1.2632 -0.49

Taiwan dlr 29.996 29.950 -0.15

Korean won 1064.30 1055.40 -0.84

Baht 33.10 32.86 -0.73

Peso 44.75 44.40 -0.78

Rupiah 12235.00 12160.00 -0.61

Rupee 62.42 61.80 -0.99

Ringgit 3.2880 3.2755 -0.38

Yuan 6.0529 6.0539 +0.02