Won leads slide in Asian currencies on China worries; baht at 4-year low

SINGAPORE (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 US 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 US economy from Federal Reserve Chairman Ben Bernanke that fanned expectations of a faster cut in stimulus by the US 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.

The won slid as much as 0.9 per cent to 1,064.8 per dollar, its weakest since Nov 28. The South Korean unit also lost 1.4 per cent to 10.2013 versus the yen, its softest since Dec 23.

The baht lost as much as 0.3 per cent 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.

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 per cent, underperforming most regional shares.

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