BLBG:Asian Currencies Fall, Led by Ringgit, as Growth Concern Curbs Risk Taking
Asian currencies fell, led by the Singapore dollar and Malaysia’s ringgit, as signs the global economic recovery is losing momentum curbed demand for emerging- market assets.
Seven of the 10 most-traded regional currencies excluding the yen dropped last week as overseas investors pulled $1.6 billion from equities in Taiwan, Thailand and South Korea, according to exchange data. The MSCI Asia-Pacific Index of shares fell for a fourth day before a report tomorrow that economists surveyed by Bloomberg predict will show U.S. retail sales dropped in May for the first time since June 2010.
The Singapore dollar slumped 0.4 percent to S$1.2364 against the greenback as of 10:07 a.m. local time, according to data compiled by Bloomberg. The ringgit dropped 0.3 percent to 3.0310 and South Korea’s won slid 0.3 percent to 1,085.75. The Philippine peso and the Thai baht weakened 0.2 percent to 43.37 and 30.45, respectively.
“Stocks are weak globally and investors are becoming risk averse in general,” said Shigehisa Shiroki, chief trader on the Asian and emerging-markets team at Mizuho Corporate Bank Ltd. in Tokyo. “With deterioration in the U.S. economic data, we may see some more downward pressure.”
The ringgit weakened on speculation Europe’s debt crisis will reduce risk appetite. A government report on June 9 showed Malaysian industrial production decreased in April for the first time since November 2009.
European Debt Crisis
“Manufacturing data are indicating the slowdown and the Europe situation will likely take months to resolve,” said Calbert Loh, head of treasury at Bangkok Bank Bhd. in Kuala Lumpur. “These could bring back double-dip concerns and limit the ringgit appreciation trend.”
The won fell to a two-week low ahead of Chinese data tomorrow that economists surveyed by Bloomberg expect will show industrial output in South Korea’s biggest export market cooled in May. A “perfect storm” of fiscal woe in the U.S., a slowdown in China, European debt restructuring and stagnation in Japan may damage the global economy, Nouriel Roubini, the New York University professor who predicted the global financial crisis, said in a June 11 interview in Singapore.
Greece is seeking its second bailout in as many years and Luxembourg’s Jean-Claude Juncker, who leads the group of euro- area finance ministers, said June 11 any additional financial aid must include “voluntary” investor participation and meet the approval of central bankers.
Thai Elections
“Economic indicators from China due tomorrow will provide a clearer picture of where the global economic recovery is headed,” said Byeon Ji Young, a currency analyst at Woori Futures Co. in Seoul.
The baht fell to its weakest level in three months after overseas investors cut holdings of the nation’s equities on concern the election on July 3 will lead to political violence and instability. Global funds sold $672 million more local shares than they bought this month through June 10, according to exchange data.
Elsewhere, Indonesia’s rupiah fell 0.1 percent to 8,530 per dollar, according to data compiled by Bloomberg. China’s yuan slid 0.1 percent to 6.4864, while Taiwan’s dollar was little changed at NT$28.837.
To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
