SEOUL: China's yuan led losses among emerging Asian currencies on Monday as local stocks collapsed after regulators cracked down on credit products and the central bank set its midpoint weaker.
The yuan fell as shares tumbled after the securities regulator barred three major brokerages from opening new margin trading accounts for clients for three months.
Malaysia's ringgit eased despite the fact that Prime Minister Najib Razak will announce policy changes, including possible budget revisions, on Tuesday to help the country adjust to the impact of the slump in global oil prices.
The Indonesian rupiah edged lower on corporate dollar demand.
The Thai baht, however, hit a near three-month high on demand from foreign institutional investors.
Still, investors hesitated to build large positions in emerging Asian currencies ahead of the European Central Bank's policy meeting on Thursday. The ECB is expected to launch a government bond-buying programme in a bid to fight off deflation.
"Asia FX this week will be choppy with very little direction going into the ECB," said Sean Yokota, head of Asia strategy for Scandinavian bank SEB, in Singapore.
"It is a binary event with potential large moves in both directions. My advice for this week is to reduce risk and not make directional calls."
RINGGIT
The ringgit fell on lower oil prices and the yuan's weakness.
The currency came under further pressure from dollar demand linked to daily fixing and bids for the neighbouring Singapore dollar.
"It is uncertain how much the budget is cut or modified," said a senior Malaysian bank trader in Kuala Lumpur on the expected policy changes.
Expectations for further slides in oil prices are also likely hurting the ringgit, the trader added.
BAHT
The baht rose as much as 0.5 percent to 32.48 per dollar, its strongest since Oct. 31.
"Some currencies in Asia are safe-haven currencies now and the baht is one of them on positive carry," said a currency trader in Bangkok.
The Thai currency, however, pared some of the earlier gains with intervention by the central bank suspected to stem its appreciation, analysts said.
The baht has a 200-day moving average at 32.44. It has been weaker than the average since late October last year.
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