SINGAPORE: Most emerging Asian currencies slid on Monday as investors cut risky assets before the US presidential and congressional elections this week, and kept a cautious eye out for potential intervention by regional authorities.
The Malaysian ringgit came under more pressure from weaker palm oil prices, while the Indonesian rupiah slid on continuous dollar demand from local companies.
The Singapore dollar edged down on selling by hedge funds and local investors, while the Philippine peso eased after holidays.
Regional stocks also slipped ahead of the US presidential election on Tuesday, as investors looked past strong US jobs data to sluggish global economic growth prospects.
US President Barack Obama and Republican challenger Mitt Romney were neck-and-neck in opinion polls in the final 48 hours before Tuesday's vote.
Investors have been focusing on how the election result may affect policies to address the "fiscal cliff" of about $600 billion in government spending cuts and higher taxes set to take effect in January.
A narrow Obama victory, especially with a convincing Republican win in Congress, is likely to bolster worries about the fiscal cliff, which may threaten the US economy and the major overseas markets of Asian countries, dealers and analysts said.
But win by Romney is not necessarily seen as a booster for emerging Asian currencies either, they added.
Some dealers and analysts said regional units may fall further if Romney becomes the new occupant of the White House, adding those currencies have priced in concerns over the fiscal cliff to some degree.
"Obama will be more supportive to emerging Asian currencies. Romney has been seen opposing the QE3 and the existing quantitative easing is likely to wane," said Yuna Park, a currency and bond analyst at Dongbu Securities in Seoul.
The Republican candidate has said that if he wins the election, he would not reappoint Ben Bernanke as Federal Reserve Chairman when Bernanke's term expires in January 2014.
That has stirred market speculation that the Fed might be more likely to end its accommodative monetary policy earlier under Romney than would be the case if Obama were re-elected.
Emerging Asian currencies have been key beneficiaries from policy easing by major central banks as such steps caused investors to seek higher-yielding assets in stronger economies.
Asian authorities have been spotted intervening to slow down appreciation in their currencies to protect export competitiveness as the global economy has not found strong growth momentum yet.
Investors also hesitated to add bets on risky emerging Asian currencies before the Chinese congress starting on Thursday and a policy meeting of the Reserve Bank of Australia on Tuesday.
RINGGIT
The ringgit slid 0.3 percent to the dollar as investors added dollar positions before the US election and weaker palm oil prices.
The Malaysian currency also came under pressure from selling against the Singapore dollar.
Malaysian palm oil futures tumbled to the lowest in more than three weeks as market participants remained worried about high stocks of oil in the world's No.2 producer.
Investors were also inclined to hold safer assets before meetings of major central banks such as the European Central Bank, as well as China's economic data.
"We will be able to see position adjustments with a little bit of risk reduction this week," said a Malaysian bank dealer in Kuala Lumpur.
PHILIPPINE PESO
The Philippine peso eased, but while remittance inflows after a four-day weekend limited the slide, dealers said.
These inflows, however, were not enough to help the peso turn higher as local banks had already prepared for them before the holidays. The country's financial markets were closed from Nov. 1. for holidays.
Investors hesitated to build up aggressive positions before the US elections, but some dealers expected further weakness in the peso.
"It would be difficult to push the peso higher after seeing the euro so low at the moment. With Greece grabbing the headlines again, I am looking at the euro to go lower," said a foreign bank dealer in Manila.
Greece's government will present a new austerity package to parliament later in the day, facing a week of strikes and protests over proposals which must win deputies' approval if the country is to secure more aid and stave off bankruptcy.
RUPIAH
The rupiah fell on continuous dollar demand from Indonesian corporates, while the central bank was spotted capping its downside at 9,630 per dollar, dealers said.
A Jakarta-based dealer said the rupiah is expected to test 9,650 this week, although the central bank is seen intervening to stem the currency's weakness.
Investors largely ignored data showing the country grew 6.2 percent in the third quarter from a year earlier - in line with forecasts.
SINGAPORE DOLLAR
The Singapore dollar edged lower as model funds and local investors sold it.
But the city-state's currency found relief as domestic corporates bought it around its weakest level in the previous session of 1.2249 per US dollar.
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