Asian currencies weakened, led by South Korea’s won, after Europe’s economic growth almost stalled and Singapore’s overseas shipments slumped. The Bloomberg-JPMorgan Asia Dollar Index fell for a second day after growth in the 17-nation euro zone slowed to the least since 2009 in the second quarter, while France and Germany rebuffed calls for bigger plans to stem the sovereign-debt crisis. The Singapore dollar halted a three-day rally after exports shrank for the first time in three months in July. The ringgit traded between gains and losses before a central bank report today that will probably show economic growth slowed. “Policy makers in Europe haven’t come up with a solution that would resolve markets so far,” said Nick Verdi, a Singapore-based currency analyst at Barclays Capital Plc. “Asian currencies will come under a bit of pressure today. We are looking for quite a gentle slowing activity in Asian economies, rather than something very sharp.” The won fell for the first time in three days, weakening 0.1 percent to 1,071.53 per dollar as of the 3 p.m. close in Seoul, according to data compiled by Bloomberg. The Philippine peso dropped 0.2 percent to 42.445 and the Singapore dollar erased a 0.3 percent gain to trade little changed at S$1.2038. Europe’s shared economy grew 0.2 percent last quarter, trailing economists’ forecast for a 0.3 percent increase. German Chancellor Angela Merkel and French President Nicolas Sarkozy rejected an expansion of the 440 billion-euro ($633 billion) bailout fund and rebuffed calls for joint euro borrowing. Singapore, Malaysia Singapore’s dollar slipped from near the strongest level since 1981 after non-oil domestic exports shrank 2.8 percent in July from a year, compared with a 1 percent gain in June, the trade ministry said. The city-state may slip into a “technical recession” this quarter, Bank of America Merrill Lynch said in a report on Aug. 5. “The risks weigh on the outlook for growth in Singapore and could contain the build-up of demand-led inflation pressures in the economy,” said Leif Eskesen, chief economist for Southeast Asia and India at HSBC Holdings Plc. “In turn, this eases the pressure on the monetary authority to tighten policies again in October.” Malaysia’s economy grew at an annual pace of 3.6 percent last quarter, compared with 4.6 percent in the first three months of 2011, according to economists in a Bloomberg News survey. Bank Negara Malaysia will release the report at 6 p.m. local time. The ringgit gained 0.2 percent to 2.9785, trimming a 0.3 percent advance. China Growth The yuan slipped from a 17-year high, losing 0.07 percent to 6.3873 per dollar. The People’s Bank of China set the currency’s reference rate 0.11 percent weaker at 6.3996, halting stronger fixing in the previous five days. China’s economy is slowing “significantly,” the Conference Board, a New York-based research organization, said yesterday. Economic growth may slow to 9.2 percent in the third quarter from 9.5 percent the previous quarter, the China Securities Journal reported yesterday, citing the State Information Center. Elsewhere, India’s rupee fell 0.1 percent to 45.4075 per dollar and Taiwan’s dollar declined 0.1 percent to NT$28.962. Thailand’s baht gained 0.1 percent to 29.87. Financial markets in Indonesia were closed for a holiday. To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

Source