Feb. 26 (Bloomberg) -- Malaysia’s ringgit fell toward a two-week low as concern the European debt crisis will worsen and crimp global growth damped demand for emerging-market assets.
The MSCI Asia Pacific Index of stocks dropped for the first time in three days after Italy’s early election results showed anti-austerity candidates won about 55 percent of the popular vote and the country may be left with a divided parliament. The Southeast Asian nation reported last week that gross domestic product rose 6.4 percent in the fourth quarter from a year earlier, beating the median estimate for a 5.5 percent increase in a Bloomberg survey.
“Asian currencies are weaker on worries that Italy’s election results will trigger an economic downturn,” said Wee-Khoon Chong, a strategist at Societe Generale SA in Hong Kong. “The currencies, including the ringgit, could fall further against the dollar as the Asian markets haven’t fully reacted to impact of the news.”
The ringgit depreciated 0.2 percent to 3.1045 per dollar as of 4:07 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency touched 3.1100, just 0.1 percent shy of the 3.1142 level reached on Feb. 22 that was the weakest since Feb. 4. One-month implied volatility, a measure of exchange-rate swings used to price options, dropped 10 basis points, or 0.1 percentage point to 7.3 percent.
Government bonds climbed. The yield on the 3.418 percent notes due August 2022 decreased two basis points to 3.47 percent, according to Bursa Malaysia.
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