Most emerging Asian currencies eased on Monday as the dollar stood tall on rising US Treasury yields and strengthening expectations for expansionary economic policies under a Trump administration. The Malaysian ringgit hit its weakest in more than 13 months. The central bank said on Friday night it would implement "prompt supervisory intervention" against individuals or banks who traded ringgit in the offshore non-deliverable forward (NDF) market or adopted its prices.
China's yuan fell to a near 8-1/2-year low as the People's Bank of China set its daily guidance rate weaker for a 12th straight session. The Philippine peso touched its weakest since the middle of the global financial crisis in 2008-2009, on equity outflows. The US dollar stayed around its highest since early April 2003 that hit on Friday against a basket of six major currencies, although it did pare some of gains. "This USD pullback, if it happens, is only a technical one," said Christopher Wong, a senior FX strategist for Maybank in Singapore.
"Bias remains to buy USD against the trade-related and open economies including the won and the yen," Wong added. Asian currencies have already been under pressure from rising US yields on prospects that Trump's policies will push up US inflation and its fiscal deficit. Trump's protectionist stance on trade also hurt the regional units, given Asia's heavy reliance on exports.
Yields on Treasuries of all maturities have registered their largest two-week gains in more than five years as prices fell when investors dumped US government debt after the November 8 US presidential election. Spot ringgit eased 0.4 percent to 4.4300 per dollar, its weakest since October 2, 2015, tracking its weakness in most NDFs. Offshore traders said the Malaysian central bank's remarks were not new and were meant for onshore investors. Most government bond prices slid with the 10-year government bond yield hitting as high as 4.404 percent, its peak since September 29, 2015.
The peso lost 0.3 percent to 49.93 per dollar, its weakest since November 2008. Foreign investors were net sellers in Manila's equity market over the previous four consecutive weeks, the Philippine Stock Exchange data showed. A senior Philippine bank currency trader said the peso could weaken to 50.15-50.30 eventually although some analysts saw a psychological support at 50.00.
"Buying the dollar on dips or rallies hasn't gone wrong," said the trader. Thailand's baht bucked against the regional depreciation trend as exporters bought it on dips for settlements. Some local banks' traders covered bearish bets on the currency, taking profits from the dollar's recent strength. Still, the baht pared earlier gains as foreign investors continued to sell domestic stocks and bonds. Thailand's economy grew 0.6 percent in the third quarter from April to June, slightly lower than expected, hurting sentiment.