Most Asian currencies tick lower, South Korea's won slips to 11-month low

Most Asian currencies softened on Tuesday, with South Korea's won slipping to a nearly one-year low, as weaker-than-expected Chinese economic data and rising coronavirus cases in the region raised concerns over growth prospects.

China, the region's largest trading partner, logged a sharp slowdown in its July retail sales growth and factory output, data showed on Monday, as new COVID-19 outbreaks, social restrictions, and floods disrupted business operations.

Yuan sheds gains

"The highly contagious Delta variant, which led to a resurgence in local cases at the end of July, also poses a downside risk to economic activity in Q3 despite a decline in daily cases over the past few days," analysts at ANZ said in a note.

Owing to the risk from surging cases, the Australian bank cut its 2021 growth forecast for China to 8.3% from 8.8% previously, saying economic growth will be of secondary priority behind a zero COVID-19 tolerance policy.

South Korean markets, opening after a long weekend, were dented by concerns about slower growth in China, its biggest trading partner, as well as over rising Delta variant cases.

Equities in Seoul were down as much as 1% in their eighth straight session of losses, and the won last traded at 1,175.9 per dollar by 0316 GMT, its lowest level since mid-September in their sixth consecutive session of weakness.

In Malaysia, the ringgit stabilised after softening to a one-year low on Monday after the cabinet led by Prime Minister Muhyiddin Yassin resigned and pushed the country into a period of political uncertainty at a time of economic downturn.

"The situation remains extremely fluid and subjected to the moves and countermoves by a multitude of players in a fractured landscape," analysts at OCBC Bank said.

"So far, while there have been some market movements, including Malaysian ringgit weakening, the degree remains small and discreet, fortunately."

The ringgit last traded at 4.2360 per dollar after weakening to 4.2430 the previous day, while equities advanced nearly a percent on Tuesday to hit their highest since late-July.

Elsewhere, shares in the Philippines added nearly 1% on top of the 3% gain logged in the previous session, while Singapore equities lost 0.8% to hit their lowest since late-July.

Markets in Indonesia, were closed for a public holiday.

A Reuters poll showed Bank Indonesia will keep its benchmark interest rate at a record low in a meeting later in the week as it tries to continue to support a recovery in Southeast Asia's largest economy without adding more pressure on the rupiah.

HIGHLIGHTS:

** Indonesian 10-year benchmark yields fall 2.9 basis points to 6.350%.

** Philippine peso appreciates as much as 0.2%.

** US 10-year benchmark yields fall 1.51 basis points to 1.2533%.