(Corrects fourth paragraph to clarify the SNB had capped the
* Focus on position unwinding after shock SNB move
* Sing dollar likely getting a boost from short-covering
* Possible switch to short euro bets from short SGD -analyst
By Masayuki Kitano
SINGAPORE, Jan 16 (Reuters) - The Singapore dollar edged
higher on Friday in a reflection of what analysts said were
traders being forced to shift their positions and strategies,
after Switzerland's unexpected move to abandon its cap on the
franc jolted financial markets.
The Singapore dollar rose about 0.2 percent to 1.3238 versus
the U.S. dollar, edging away from a four-year low of
1.3419 set last week.
"Since volatility has risen suddenly, a position unwinding
type of move seems to be taking place," said a trader for a
Japanese bank in Singapore, referring to Asian currencies in
The Swiss franc had surged as much as 30 percent to a high
of 0.8500 franc per euro on Thursday after the Swiss National
Bank (SNB) suddenly ditched its cap on the Swiss franc.
"We see a broader deleveraging dynamic happening in EM as a
result of that. A lot of investors or corporates who were hit by
the move yesterday, would be looking to cut their risk positions
in general," said Divya Devesh, FX strategist for Standard
Chartered Bank in Singapore.
That suggests that any currencies in which market
positioning was tilted toward being either very bullish or very
bearish, could be pushed around by position squaring.
Andy Ji, Asian currency strategist for Commonwealth Bank of
Australia, said the rise in the Singapore dollar and the Taiwan
dollar after the SNB move may be a result of investors switching
their preferred funding currency to the euro.
The Taiwan dollar touched a near one-month high of 31.548
versus the U.S. dollar earlier on Friday and was last
up about 0.6 percent on the day.
The Taiwan dollar and the Singapore dollar have been
popular funding currencies, which investors would sell to fund
investment in higher-yielding currencies and assets, Ji said.
"They were funding currencies but I think market just got
out of those shorts," he said, adding that they were now
probably shifting to short positions in the euro instead.
The euro languished just above an 11-year trough versus the
U.S. dollar as investors wagered that the Swiss move to
abandon its currency cap meant it was almost certain the
European Central Bank would launch large-scale bond buying next
SOUTH KOREAN WON
The South Korean won rose against the dollar,
after the Japanese yen touched a one-month high on safe
A stronger yen gives investors more flexibility in making
bullish bets on the won as it reduces the risk of intervention
by financial authorities to keep the local currency competitive.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0554 GMT
Currency Latest bid Previous day Pct Move
Japan yen 116.40 116.15 -0.21
Sing dlr 1.3238 1.3263 +0.19
Taiwan dlr 31.606 31.786 +0.57
Korean won 1076.50 1083.30 +0.63
Baht 32.65 32.77 +0.37
Peso 44.68 44.68 +0.00
Rupiah 12580.00 12555.00 -0.20
Rupee 61.88 62.06 +0.30
Ringgit 3.5640 3.5605 -0.10
Yuan 6.2070 6.1881 -0.30
Change so far in 2015
Currency Latest bid End prev year Pct Move
Japan yen 116.40 119.66 +2.80
Sing dlr 1.3238 1.3260 +0.17
Taiwan dlr 31.606 31.718 +0.35
Korean won 1076.50 1099.30 +2.12
Baht 32.65 32.90 +0.78
Peso 44.68 44.72 +0.10
Rupiah 12580.00 12380.00 -1.59
Rupee 61.88 63.03 +1.87
Ringgit 3.5640 3.4965 -1.89
Yuan 6.2070 6.2040 -0.05
*Markets in the Philippines are closed on Friday for a public
(Additional reporting by Joonhee Yu in SEOUL; Editing by Shri