Banner

Asia Currencies Complete Worst Week This Year

Attention: open in a new window. PDFPrintE-mail

From International Desk - International Currency News

Asian currencies posted their biggest weekly decline since November, led by Malaysia s ringgit and India s rupee, as regional stocks plunged on concern the global economic recovery is stalling.

 

The MSCI Asia-Pacific Index of equities dropped 7. 8 percent this week, the most since October 2008, as reports from the U. S. showed consumer spending fell in June for the first time since September 2009 and a July manufacturing index reached the lowest level in two years, damaging Asia s export outlook. Global funds sold $2. 1 billion more South Korean and Taiwanese shares than they bought this week through Aug. 4, exchange data show.

 

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region s 10 most-traded currencies excluding the yen, declined 0. 7 percent from a week ago to 119. 11 yesterday. The ringgit weakened 1. 6 percent to 3. 0150 per dollar, the rupee slumped 1. 2 percent to 44. 74 per dollar and South Korea s won dropped 1. 5 percent to 1,071. 7, according to data compiled by Bloomberg. The Philippine peso fell 1 percent to 42. 568.

 

 Stocks are plunging globally and there s growing concern about a slowdown in global economic growth, said Kozo Hasegawa, a currency trader at Sumitomo Mitsui Banking Corp. in Bangkok. That s making investors risk averse.

 

Bank of America Merrill Lynch cut gross domestic product forecasts for some Southeast Asian economies, citing lower expectations for growth in the U. S. , Europe and Japan, according to a report received yesterday. It reduced Singapore s growth estimate for 2011 to 4. 5 percent from 4. 8 percent and the Philippines to 4. 7 percent from 5. 8 percent. Malaysia s GDP growth may be below 4 percent in the second quarter, the bank said. The country s economy expanded 4. 6 percent in the first three months of the year, the smallest gain since 2009.

South Korean Meeting

 

The ringgit sank to a three-week low yesterday before a Labor Department report showed that U. S. employers added more jobs than forecast in July with payrolls rising by 117,000 workers. The U. S. jobless rate fell to 9. 1 percent.

 

 People are shying away from risk in reaction to the meltdown in the stock markets in the U. S. and Europe, said Yeo Chin Tiong, head of financial markets at Alliance Bank Bhd. in Kuala Lumpur. There are no signs of intervention from the central bank. What we are seeing is a lot of position squaring and adjustment.

 

The won had its biggest weekly drop since February. The government will closely monitor the impact in financial markets, with officials from the finance ministry, the Bank of Korea and regulators to hold an emergency meeting on Aug. 7, the ministry said yesterday.

 Steep Slide Unlikely

 

 Global stock market plunges are prompting foreign investors to sell Korean stocks, dragging the currency down, said Han Sung Min, a foreign-exchange dealer at Busan Bank in Seoul. Still, a steep slide is unlikely as market players think the government will start intervening around 1,075.

 

Elsewhere, the Singapore dollar fell 1. 2 percent to S$1. 2200 against its U. S. counterpart. Indonesia s rupiah declined 0. 8 percent to 8,574, Taiwan s dollar dropped 0. 4 percent to NT$28. 965 and the Thai baht weakened 0. 2 percent to 29. 89. China s yuan slipped 0. 05 percent to 6. 4404.

 

Courtesy: Bloom Berg


Forex open Market rates & comments Archive

Login Form