Ringgit Falls as Europe Damages Growth Prospects for Asia

The Malaysian ringgit fell today as concerns about the troubles in Europe hurt the outlook for the economic growth in Asia and reduced appeal of the emerging market currencies. The yesterday’s cut of Italy’s credit rating by Standard and Poor’s spurred risk aversion on markets, reducing demand for assets of emerging economies. The Bloomberg-JPMorgan Asia Dollar Index dropped to the lowest level in six months. The Asian Development Bank cut this year’s growth forecast for Asia (with the exception of Japan) to 7.5 percent from the April forecast of 7.8 percent. USD/MYR advanced from 3.1175 to 3.1195 as of 16:23 GMT today, following the rise to 3.1435.