Won leads Asia FX losses

The South Korean won led losses among emerging Asian currencies on Monday ahead of US Federal Reserve Chair Janet Yellen's congressional testimony this week, and on the dollar's strength during Lunar New Year holidays last week in the region. A Greek debt deal has not supported emerging Asian currencies much as regional shares barely rose, given doubts over Greece's new government's capacity to implement its proposed reforms.
Euro zone ministers late on Friday agreed to extend Greece's financial rescue package by four months, a shorter extension that the six months the country had sought. The government has to provide a list of reform measures to euro zone by Monday to secure financing but domestically it came under attack for selling "illusions" to voters after failing to keep a promise to extract the country from its international bailout. The won hit a seven-week low on selling from offshore funds, while South Korea's central bank chief said current monetary policy was focused on restoring economic growth.
Malaysia's ringgit fell to a near six-year low as oil prices slid earlier, underscoring concerns that lower crude oil prices may hurt the current account surplus and raise the fiscal deficit. Malaysia is a net oil exporter. The Singapore dollar turned weaker as consumer prices in January fell 0.4 percent from a year earlier, the lowest since December 2009. Currency investors are focusing on Yellen's testimony on the economy and monetary policy at Congress on Tuesday and Wednesday.
The minutes from the Fed's January policy meeting published last week were more dovish than expected, but signs of increasing strength in the US jobs market could revive expectations of a rate hike in June. "There may be some pressure on her to clarify the exact degree of the Fed's 'patience', and just what constitutes sufficient conditions for a move on rates," Sacha Tihanyi, senior currency strategist for Scotiabank, said in a research note.
"The tone of the questioning and the colour of the responses that Yellen may find herself pushed to give suggests potential upside risk in USD/Asia." The won lost as much as 0.9 percent to 1,111.4, its weakest since January 5, as offshore funds sold it on weakness last week. Financial markets in South Korea were closed between from Wednesday and Friday to mark the Lunar New Year holidays.
The South Korean currency pared some of earlier losses as local exporters bought it for settlements on dips. The ringgit slid as much as 0.7 percent to 3.6445 per dollar, its weakest since April 2009, tracking its slide in non-deliverable forwards markets during local holidays on Thursday and Friday.
The ringgit recovered some of its earlier losses as traders covered short positions as oil prices rebounded later in the day. State fund 1Malaysia Development Bhd (1MDB) said that the refinancing of its debt will involve the finance ministry "as relevant and as required" after media reported that the government may inject up to 3 billion ringgit ($824 million) into the fund.