(Bloomberg) -- The South Korean won and Malaysian ringgit led declines in emerging-market currencies as concern about the financial health of Germany's biggest lender sapped demand for higher-yielding assets.
A gauge of developing-nation foreign-exchange dropped for a third day as better-than-expected U.S. economic data bolstered bets the Federal Reserve will raise interest rates by year-end. Equities fell around the world and the dollar strengthened.
“Dollar strength is returning coupled with the drop in U.S. stocks,” said Wu Mingze, a foreign-exchange trader in Singapore at INTL FCStone Inc., a Nasdaq-listed global payments-service provider. “U.S. data will continue to dominate as speculators look towards December as the key date for a rate hike.”
The won declined 0.5 percent to 1,103.73 per dollar as of 10:03 a.m. in Hong Kong after weakening as much as 0.7 percent. The ringgit fell 0.5 percent to 4.1430 per dollar, extending this month's decline to 2.2 percent. The MSCI Emerging Markets Currency Index slipped 0.2 percent.
Bank Concerns
Deutsche Bank AG shares slid to a record in the U.S. as Bloomberg News reported that some hedge funds have reduce their exposure to the company. Fellow German lender Commerzbank AG said Thursday it would cut one in five of its employees and suspend dividend payments.
“The appetite for riskier assets has weakened on worries over euro-zone banks,” said Min Gyeong-won, a currency analyst at NH Futures Co. in Seoul. “The won's fall will likely be limited though, as we will probably see month-end dollar sales by exporters.”
South Korean bonds rose for a fourth day, with the three-year yield dropping four basis points to 1.26 percent. Ten-year fell three basis points to 1.42 percent.
To contact the reporters on this story: Jung Park in Seoul at jpark710@bloomberg.net, Liau Y-Sing in Kuala Lumpur at yliau@bloomberg.net.
To contact the editors responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net, Nicholas Reynolds, Tomoko Yamazaki
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
