Most Asian currencies fall

Most emerging Asian currencies extended declines on Monday, with the Malaysian ringgit at a near three-year low, as rising US Treasury yields fuelled fears of more capital outflows as the Federal Reserve prepares to scale back stimulus measures. Worries about China's economic and stability also dragged regional currencies lower, traders said.
The ringgit, the Thai baht and the Philippine peso came under pressure from weaker bonds in those countries, while the South Korean won hit a one-year low as foreign investors kept selling local stocks. "The macro outlook this week for Asia and its relevance for currencies will continue to take a back seat to the direction of US interest rates and the general outflows from Asian equity and fixed income markets," Scotiabank said in a client note. Emerging Asian currencies suffered a heavy sell-off last week, with the Indian rupee hitting a fresh record low. The ringgit and the Philippine peso saw their worst weekly slides in about three years.
Fed Chairman Ben Bernanke on June 19 signalled the central bank would taper its bond-buying programme starting later this year and end the quantitative easing by the middle of 2014. The ringgit lost as much as 0.5 percent to 3.2190 per dollar, the weakest since July 2010, as custodian banks and offshore funds sold the currency, traders said.
Five-year government bond yields rose to 3.572 percent, the highest since May 2011, and three-year yields advanced to 3.398 percent. The 10-year yields stayed at 3.633 percent, the highest since April 2012. But some traders said the ringgit's recent weakness is excessive. It lost 2.7 percent against the dollar last week, the largest weekly decline since May 2010, according to Thomson Reuters data. "I may want to take profits from dollar around 3.218 and 3.22. I am waiting for signs of exhaustion of dollar/Asia's upside," said a senior Malaysian bank trader in Kuala Lumpur.
But the trader said he would buy the dollar around 3.2000. The won hit a fresh one-year low of 1,161.5, the weakest since late June 2012, as foreign investors kept selling Seoul shares and on dollar demand from offshore funds. Foreigners were net sellers in the main stock market for a 12th straight session. They have dumped a combined net 5.4 trillion won ($4.7 billion) in shares during the period, according to the Korea Exchange data.
The peso slid as Manila stocks lost 3.5 percent. Investors stayed cautious as the central bank was expected to step in the market to limit its downside. The authority was spotted intervening last week, traders said. The baht fell in thin trade with softer local stocks and bonds, traders said.