Malaysia's ringgit traded near its lowest level in more than a month as concern that Europe's financial crisis would worsen dampened demand for emerging-market assets.
The currency declined for a second day after European finance ministers failed to agree on a debt-reduction package for Greece.
Malaysia's government bonds gained before a report that could show inflation held at the slowest pace since February 2010.
Consumer prices rose 1.3 per cent last month from a year earlier, matching the increase in September, according to a median estimate of 18 economists surveyed before the release of official data, due tomorrow. "Demand for Asian currencies is limited because of concerns over Greece," said Saktiandi Supaat, the head of foreign exchange research at Malayan Banking in Singapore.
"The ringgit and other Asian currencies will likely trend weaker."
The ringgit held at 3.0618 per US dollar in Kuala Lumpur yesterday.
It touched 3.0643 earlier, falling towards the level of 3.0783 reached on November 16, which was the weakest since October 11.
One-month implied volatility, a measure of exchange-rate swings used to price options, slid 10 basis points, or 0.1 of a percentage point, at 4.9 per cent, the least since June 11, 2007.
Government bonds were little changed. The yield on the 3.418 per cent notes due August 2022 was steady at 3.47 per cent, according to Bursa Malaysia.