22 DEC, 2011, 11.01AM IST, REUTERS
Asian currencies dipped broadly versus the dollar on Thursday with the South Korean won paring some of the last two days' gains, as risk-taking was curtailed by persistent worries about the euro zone's debt crisis.
The won fell 0.9 percent against the dollar and led the broad fall in emerging Asian currencies. The Singapore dollar edged up 0.1 percent, holding firm compared to its Asian peers.
Market players have been reluctant to chase Asian currencies higher and are cautious about their outlook for coming months due to concerns about the impact of the euro zone's debt crisis on Asian economies.
Still, some market players do seem to be betting that emerging Asian currencies will head higher against the euro, said Rob Ryan, FX strategist for BNP Paribas in Singapore.
One factor that may be encouraging such bets is the possibility that China may adopt further monetary stimulus to support its economy, such as reducing the ratio of deposits banks are required to keep as reserves, Ryan said.
"If that helps to put a floor under Asian growth, then on a relative basis Asia will still be looking more attractive than certainly Europe," he said, adding that recent moves in the euro versus the Singapore dollar suggest that such positioning may be taking place.
Although the Singapore dollar has dropped 1.1 percent versus the U.S. dollar so far in December, it has climbed roughly 1.9 percent against the euro.
