The ringgit fell to its weakest level against the US dollar in more than two weeks. Offshore funds sold the currency in non-deliverable forwards market as five-year government bond prices fell.
The Malaysian unit hit a 17-year low against the Singapore dollar. Investors bought the Singapore dollar versus the ringgit as the city-state’s central bank yesterday unexpectedly held off from delivering more stimulus.
South Korea’s won slid on dollar demand linked to local companies’ dividend payments to foreign shareholders. China grew at its slowest pace in six years at the first quarter and weakness in key sectors suggested the economy was still losing momentum, intensifying Beijing’s struggle to find the right policy to support activity.
“There are still abundant downside risks. It doesn’t bode well with Asia,” said Andy Ji, Asian currency strategist for Commonwealth Bank of Australia in Singapore. Potential monetary easing by China may not help Asian currencies much as fresh liquidity may not flow into the real economy and financial markets due to slowing global growth, Ji said.
“We have seen diminishing effects from past liquidity injections,” he said.
Ringgit
The ringgit fell 0.6 per cent to 3.7210 per dollar, its weakest since March 30.
Malaysia government’s five-year bond yield rose to 3.645 per cent, its highest since March 23. Against the Singapore dollar, the ringgit fell to 2.7284, its weakest since January 1998.
Won
The won tracked the yen’s weakness amid concerns that South Korean exporters may lose competitiveness against Japanese rivals.
Traders hesitated to dump the South Korean currency as foreign investors continued to buy Seoul shares.
Foreigners were to poised to become net buyers in the main stock market for a seventh consecutive session, absorbing a combined net 1.6 trillion won (RM5.4 billion) during the period, the Korea Exchange data showed. — Reuters
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