SINGAPORE -- The South Korean won and Malaysian ringgit led a sell-off in Asian currencies on Tuesday as investors cut riskier assets amid concerns about the economic fallout from the swine virus outbreak.

Governments around the world took steps to contain the spread of the deadly swine flu that has killed up to 149 people in Mexico and spread to Europe and possibly Asia.

Risk aversion was also fuelled by a report that regulators have told Citigroup and Bank of America Corp. they may need to raise more capital based on early results of the government's "stress tests" of lenders.

RINGGIT

The Malaysian ringgit lost nearly 0.8 percent to 3.6230 per dollar while offshore dollar/ringgit non-deliverable forwards curve shifted upward slightly.

"The focus is on risk aversion due to the swine flu," said a Kuala Lumpur-based trader.

Three-month NDFs price in a 0.3 percent ringgit depreciation from the spot.

The spread, which was close to zero on Monday, has been narrowing steadily after hitting 1.3 percent in early March.

The central bank is expected to cut rates by 25 basis points on Wednesday to spur growth.

But traders said market expectations ranged from no change to a 50-basis-point cut.

YUAN

The Chinese yuan eased a tad to 6.8281 per dollar, off its highest level since Jan. 5 struck on Monday.

Offshore dollar/yuan NDF curve moved slightly higher, with one-year contracts edging up to 6.785, implying a 0.6 percent yuan appreciation from the spot compared to 0.8 percent priced in on Monday and Friday's 1.2 percent.

"The euro is lower, the equity market doesn't perform and the dollar/yuan fixing was slightly higher," said a NDF trader in Singapore.

The People's Bank of China set the yuan's daily mid-point, or fixing, at 6.8274 per dollar compared to Monday's 6.8253.

The NDF curve has priced in modest yuan appreciation since late March amid tentative signs of recovery in the world's third-largest economy.

Analysts believe the central bank will keep the yuan largely stable this year -- extending its policy implemented since last July -- to curb capital outflows although the yuan is likely to resume appreciation over the long-term.