SINGAPORE: Most emerging Asian currencies fell on Monday as anxiety grew ahead of a referendum of Britain's potential exit from the European Union and the US Federal Reserve's monetary policy meeting.
With risk sentiment hammered, emerging Asian currencies lost ground against the safe-haven yen and regional equity markets fell the most in more than two months.
The Chinese yuan slid as the central bank set its daily guidance rate weaker after last week's long public holiday.
South Korea's won fell to its weakest against the US dollar in more than a week on importers' demand for the greenback. The Malaysian ringgit hit a one-week trough as sliding crude prices underscored concerns over the country's oil and gas revenues.
U.K. voters were still closely divided over whether to end Britain's EU membership, two polls on Saturday showed, underlining contradictory polling before the June 23 referendum.
The Fed starts a two-day policy meeting on Tuesday when it is expected to keep interest rates unchanged, while investors awaited indications over the timing of the next rate increase.
"The Brexit concerns are likely to last for a while, hurting general risk sentiment and emerging Asian currencies," said Jeong My-young, Samsung Futures research head in Seoul.
"The Fed may stay with its stance of 'a gradual rate increase and data dependent' rather than making hawkish comments. That may not help risk sentiment either as ultra-low interest rate environments could create bubbles in bond markets," said Jeong, pointing to continuous demand for bonds despite negative yields in some European countries and Japan.
WON
The won slid nearly 0.8 percent to 1,174.3 per dollar, its weakest since June 3.
South Korea's importers scrambled for dollars for payments, while exporters were on the sidelines, traders said.
Foreign currency bank deposits fell in May to their lowest level in three months, central bank data showed earlier, indicating foreign currency selling for the won could weaken.
RINGGIT
The ringgit lost 0.8 percent to 4.1060 per dollar, its weakest since June 6.
Traders rushed to sell the Malaysian currency, given the general risk aversion.
"I told my clients to stay long USD on any dips, asking importers not to wait for buying dollars," said a senior Malaysian currency trader in Kuala Lumpur.
The trader expected the ringgit to weaken to as far as 4.1800 by this week or next week.
TAIWAN DOLLAR
The Taiwan fell as traders sold the currency to reflect weakness in regional peers on Friday, when the local financial markets were closed for holidays.
Taipei stocks lost more than 2 percent, weighing on the currency.
The island's currency pared some of its earlier losses as exporters bought it for settlements on dips, traders said.
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