Won Leads Asian Currency Declines as U.S. Debate Fuels Anxiety

  • Sentiment weakened further by anxiety over Deutsche Bank
  • Philippine peso extends slide to 7-year low; Ringgit declines

Emerging Asian currencies declined, led by the South Korean won and the Malaysian ringgit, as investors sought havens during the first U.S. presidential debate and as concerns mounted about Deutsche Bank AG. 

The flight to safety accelerated after shares in Germany’s biggest lender plunged to a record, sparking a selloff in global financial stocks, amid speculation the bank will need to raise capital. The first of three debates between Hillary Clinton and Donald Trump started late Monday New York time, and a Bloomberg poll showed were tied in a head-to-head contest. The MSCI Emerging Markets Currency Index fell for a third day, while gauge of the dollar against its major peers rose. Regional equities declined 0.3 percent.

“It’s risk-off because there was a big sell-off in European banks yesterday,” Michael Every, head of financial markets research for Asia-Pacific at Rabobank International in Hong Kong. “At the same time we’ve got the American presidential debate,” Every said, adding that a strong debate performance by Trump would point to the risk that “he could be elected and put tariffs on Asian products.”

The won was down 0.2 percent to 1,109.95 per dollar as of 9:25 a.m. in Hong Kong, falling for a second day. The currency is seen moving in range 1,108 to 1,120 range on Tuesday, according to Ha Keon-Hyeong, a Seoul-based economist at Shinhan Investment Corp. The ringgit and the Philippine peso each declined 0.3 percent.

Longer-term bonds outperformed in South Korea, with the yield on three-year notes little changed at 1.3 percent, while those on 10-year notes retreated 2 basis points to 1.48 percent.

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