July 6, 2015 / 5:07 AM / 2 years ago

EM ASIA FX-Ringgit at 16-year low on political woes, Greece hits EM Asia FX

* Malaysia stocks, bonds prices fall
    * Ringgit at fresh low vs Singapore dlr on data back to 1990
    * Won down as Seoul shares fall 2 pct; importers hurt rupiah

 (Adds more details, analyst. Updates prices)
    By Jongwoo Cheon
    SINGAPORE, July 6 (Reuters) - The Malaysian ringgit hit a
16-year low on Monday after reports linked the country's prime
minister to probes into alleged corruption, while most emerging
Asian currencies slid as Greeks rejected austerity measures for
bailout money.
    The ringgit fell as much as 0.8 percent to 3.8075 per
dollar, its weakest since May 1999. Against the neighbouring
Singapore dollar, the ringgit touched 2.8189, the
lowest level according to Thomson Reuters data going back to
1990.
    Kuala Lumpur stocks lost 1.3 percent, while the
10-year government bond yield and the 5-year yield
 jumped.
    Two of Malaysia's main opposition parties on Sunday demanded
an emergency sitting of parliament to discuss Prime Minister
Najib Razak's future after a media report linked him to
investigations involving state fund 1MDB. 
    A Wall Street Journal report published on Friday said
investigators had traced nearly $700 million to bank accounts
they believed belonged to the prime minister.
    Najib has denied taking any money from the debt-laden state
fund or any other entity for personal gain.
    "The report supports our conjecture that an increase in
political risk has undermined confidence that sovereign support
would be forthcoming if needed for 1MDB," said Tim Condon, head
of research Asia for ING in a client note.
    The ringgit was the worst-performing Asian currency so far
this year with an 8.1 percent loss against the U.S. dollar.
    Chat support for the Malaysian currency is seen between
3.8000 and 3.8200 - the 1997/98 Asian financial crisis peg level
and the 38.2 percent Fibonacci retracement of its depreciation
from 1978 to 1998, analysts said.
    If the area is breached amid the escalating political
tensions, the ringgit may weaken to 3.9060, the 50 percent
retracement of its appreciation from 1998 to 2011, they added.
    
    GREECE HITS ASIA FX
    Most other emerging Asian currencies fell as Greeks voted
against conditions of a rescue package from creditors on Sunday,
increasing doubts over the future of the country's euro zone
membership and denting risk appetite. Asian
stocks and the euro tumbled.
    The South Korean won hit a near four-month low of
1,128.0 on the dollar as Seoul shares lost 2 percent on
the back of foreign selling. Indonesia's rupiah slid
0.3 percent to 13,358 on dollar demand from importers for
payments.
    "This is not simply because of risk aversion from Greece,
but more importantly because, various Asian currencies had
pre-existing negative drivers," said Heng Koon How, Credit
Suisse Private Bank's senior currency strategist in a note.
    "In particular, we stay negative on the KRW, IDR, MYR," said
Heng, adding 12-month targets of those currencies against the
dollar are 1,200, 14,000 and 3.9500, respectively.
    Malaysia faces increasing risks of foreign investor
liquidation of government bonds, Heng said. South Korea is
losing export competitiveness due to a weaker yen, while
domestic demand is slowing due to the outbreak of Middle East
Respiratory Syndrome (MERS), he added.    

    CURRENCIES VS U.S. DOLLAR
    Change on the day at 0450 GMT
  Currency    Latest bid   Previous day    Pct Move
  Japan yen       122.32         122.78       +0.37
  Sing dlr        1.3509         1.3460       -0.36
  Taiwan dlr      30.938         31.120       +0.59
  Korean won     1127.40        1123.00       -0.39
  Baht             33.81          33.79       -0.06
  Peso             45.14          45.02       -0.27
  Rupiah        13358.00       13318.00       -0.30
  Rupee            63.59          63.44       -0.24
  Ringgit         3.8060         3.7775       -0.75
  Yuan            6.2079         6.2057       -0.04
 
  Change so far in 2015
  Currency    Latest bid  End prev year    Pct Move
  Japan yen       122.32         119.66       -2.18
  Sing dlr        1.3509         1.3260       -1.84
  Taiwan dlr      30.938         31.718       +2.52
  Korean won     1127.40        1099.30       -2.49
  Baht             33.81          32.90       -2.69
  Peso             45.14          44.72       -0.93
  Rupiah        13358.00       12380.00       -7.32
  Rupee            63.59          63.03       -0.88
  Ringgit         3.8060         3.4965       -8.13
  Yuan            6.2079         6.2040       -0.06
 
 (Additional reporting by Reuters FX Analyst Krishna Kumar in
SYDNEY; Editing by)

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