BLBG:Asian Currencies Decline This Week, led by Rupee, on Slowdown Concerns
Asian currencies declined this week, led by India’s rupee and Malaysia’s ringgit, on concern global economic growth will slow as Europe’s sovereign-debt crisis deepens and the U.S. economic recovery remains fragile.
Overseas investors pulled $1.6 billion from Taiwanese, South Korean and Thai stocks in the first four days of the week, exchange data show. Greece will default on its debt and Portugal and Ireland are likely to suffer the same fate, Martin Feldstein, former president of the U.S.-based National Bureau of Economic Research, said yesterday. Treasury Secretary Timothy F. Geithner warned U.S. lawmakers yesterday that the Aug. 2 deadline to raise the federal debt ceiling would not be extended.
“There’s the ongoing debate on the U.S. debt ceiling and the European debt issue,” said Goh Puay Yeong, a Singapore- based strategist at Credit Suisse Group AG. “These two factors are constraining investors’ appetite” for higher-yielding assets, he said.
The rupee declined 0.3 percent for the week to 44.4775 per dollar as of 9:36 a.m. in Mumbai, according to data compiled by Bloomberg. The ringgit weakened 0.4 percent to 3.0045. Both currencies snapped two weeks of gains. The Philippine peso fell 0.4 percent to 42.915 and the Taiwan dollar lost 0.3 percent to NT$28.874. Indonesia’s rupiah retreated 0.2 percent to 8,538.
Europe’s sovereign-debt crisis spread to some of the region’s larger economies earlier in the week, with Italy and Spain’s 10-year bond yields climbing to their highest levels in at least a decade on July 12.
Korean Growth Downgrade
Taiwan’s dollar headed for a second weekly decline as foreign funds sold $919 million more of the island’s shares than they bought in the last four days.
“Investors are still concerned recoveries in the U.S. and Europe are not going well,” said Eric Hsing, a fixed-income trader at First Securities Inc. in Taipei. “Foreign funds have sold a lot of stocks recently, dragging down the Taiwan dollar.”
The peso was headed for its first weekly decline in a month after overseas shipments unexpectedly declined in May. Exports dropped 3.2 percent from a year earlier, compared with the median forecast for a 4.3 percent gain in a Bloomberg survey of economists, data showed July 12.
The Bank of Korea lowered its economic growth forecast for this year on an expected slowdown in domestic demand. South Korea’s economy will expand 4.3 percent, compared with the 4.5 percent growth estimated in April, the central bank said today. The won was little changed for the week and rose 0.1 percent to 1,057.35 today.
Elsewhere, Singapore’s dollar added 0.3 percent for the week to S$1.2164 against its U.S. counterpart. China’s yuan strengthened 0.05 percent to 6.4616.
To contact the reporter on this story: Khalid Qayum in Singapore at kqayum@bloomberg.net Chien Mi Wong in Singapore at cwong303@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
