* Investors snap up dollar, euro vs won on stop losses
* Slides in peso, rupiah prompt intervention

By Kevin Yao
 
SINGAPORE – The South Korean won tumbled to its lowest in seven months on Thursday as investors scrambled to buy dollars to cut losses, leading other Asian currencies lower amid nagging worries over the euro zone’s debt crisis.

The euro fell again after a brief rebound in the previous day, edging back towards a four-year low. Investors were nervous because of policy disarray in the euro zone following Germany’s move to ban naked short-selling in some securities.

Investors have dumped Asian stocks and bonds in recent weeks as part of a broad retreat from risky assets.

"This year started with global investors upbeat on Asia and we saw large inflows into Asia all through 2009 and early 2010," said Bratin Sanyal, head of Asian equities with ING Asset Management in Hong Kong who oversees $2.4 billion.

"With global turmoil and growing risk aversion we are seeing some money being pulled out and flowing back into home markets.

We can see that in the strengthening dollar, the declining local currencies and in the exchange data in the last couple of weeks."

He expected fund outflows from Asia to stabilise once investors see improvements in Europe’s debt problems.

Thai markets were closed.
    
 WON

The won lost as much as 2.6%  to 1,196.7 per dollar, the weakest since Oct. 2009, as investors scrambled to buy dollars to cut losses.
 
"I cannot find dollar offers," said a dealer in Seoul.

 Implied volatilities in South Korean won  jumped across tenors as the spot won tumbled, with one-month volumes hitting 20%, the highest since July 2009.

"Dollar/won broke 1,180, triggering stop-loss buying," said a trader in Singapore.

Traders said funds had joined the rush to buy the euro against the won, adding pressure on the currency.

"We see heavy short (dollar) covering from offshore. Guess it’s from euro/Asia short covering — euro/won jumped against won today," said another trader in Seoul.

The won slid to 1,481.27 to the euro  from 1,446.26 late on Wednesday.
    
PESO

The Philippine peso  shed just over 1%  to 46.13 per dollar Fake Watches, even as the central bank was seen intervening to support the currency.
 
"The peso continues to track the moves in Asia. We see quite a lot of buying interest in dollar/peso at the moment," said a second trader.

Some traders estimated dollar sales of about $200 million by the central bank to smooth out the peso’s decline.

Dollar/peso climbed along the curve, with one-month contracts rising to 46.50 from 45.90 late on Wednesday.

The peso’s fall was limited by renewed foreign buying of local bonds after news that the Philippine budget has swung into a surplus in April.

 "We’re actually seeing good buying interest for local bonds right now," said a bond dealer.
    
 RUPIAH

The Indonesian rupiah  lost nearly 1.6% to 9,295 per dollar as investors dumped risky assets, prompting the central bank to sell dollars in support Fake Watches, traders said.

 "The central bank intervened at various level, but the the amount its dollar sales is small," said a trader in Jakarta.

 The high-yielding rupiah has lost more than 3 percent against the dollar dollar in the past month.