Asian currencies fell on speculation Europe’s debt crisis will sap demand for riskier assets, overshadowing China’s decision to widen its currency trading band for the first time in five years. Malaysia’s ringgit fell the most since April 4, snapping a three-day rally, after the cost of insuring Spain’s bonds against default surged to a record last week. South Korea’s won retreated from a one-week high after the central bank trimmed its 2012 growth forecast and the People’s Bank of China weakened the yuan’s daily reference rate. “A weakening in Europe’s economy would hurt export sentiment since Asia exports a lot of goods to Europe,� said Sean Yokota, a currency strategist at UBS AG in Singapore. “Risk aversion encourages people to buy dollars and Treasuries as a safe haven, and that hurts Asian currencies.� The ringgit weakened 0.4 percent to 3.0650 per dollar as of 10:07 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The won slid 0.2 percent to 1,137.25, the Philippine peso fell 0.2 percent to 42.717 and Indonesia’s rupiah declined 0.4 percent to 9,175. The yuan dropped 0.3 percent to 6.3198. The Bloomberg-JPMorgan Asia Dollar Index (ADXY), which tracks the region’s 10 most-used currencies excluding the yen, fell 0.2 percent, halting a three-day advance. The MSCI Asia-Pacific Index of stocks slumped 0.9 percent. Outlook Dims Yields on Spain’s 10-year notes reached as high as 6 percent on April 13, approaching the 7 percent level that prompted Greece, Ireland and Portugal to seek bailouts. South Korea’s central bank lowered its 2012 growth forecast today to 3.5 percent, from a December estimate of 3.7 percent, amid volatile oil prices and concern about Europe’s debt crisis. The People’s Bank of China weakened its daily fixing for the yuan by 0.13 percent to 6.2960 per dollar after doubling the limit of the currency’s moves to 1 percent from the reference rate. The yuan fell to as much as 0.46 percent below the fixing, not making use of the new limit. The trading band was last widened in May 2007, to 0.5 percent from 0.3 percent. “The message of this move is that the renminbi’s appreciation story is over,� Qu Hongbin, chief economist for China at HSBC Holdings Plc, said on April 14 after the announcement. “Greater two-way volatility will be the name of the game going forward.� Yuan volatility has risen since February as bets for appreciation waned amid an economic slowdown and Chinese officials said the exchange rate may be near its equilibrium. Three-month implied volatility jumped as much as 50 basis points today to 2.9 percent, the highest since Jan. 6. Elsewhere, Taiwan’s dollar rose 0.1 percent to NT$29.513 versus the greenback and Vietnam’s dong appreciated 0.9 percent to 20,740 per dollar. Financial markets in Thailand are closed for a public holiday. To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net; To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net `

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