Asian currencies fell this week, led by India’s rupee, as U.S. data added to signs the global economic recovery is losing steam and Europe’s worsening debt crisis bolstered demand for dollars. The MSCI Asia-Pacific Index of shares dropped for a fourth week as investors favored safer bets than emerging-market assets. U.S. reports published yesterday showed consumer confidence is the weakest since March 2009, existing home sales dropped in July and jobless claims rose more than economists forecast last week. Taiwan released second-quarter gross domestic product data late yesterday, joining China, South Korea, Hong Kong, Malaysia and Singapore in reporting the slowest expansions since 2009. “The risk of recession has increased and we do expect some further monetary stimulus from the U.S.,” said Roy Teo, a foreign-exchange strategist at ABN Amro Private Bank in Singapore. “It’s hard to predict the turning point as to when the European policies will calm the market and until they do so, the dollar will be supported and Asian currencies could come under more pressure.” The rupee declined 0.7 percent this week to 45.7475 per dollar in Mumbai, before local markets were closed for a holiday today, according to data compiled by Bloomberg. South Korea’s won slid 0.3 percent to 1,082.30 as of 1:30 p.m. in Seoul, while China’s yuan fell 0.1 percent to 6.3960. The Bloomberg-JPMorgan Asia Dollar Index, which tracks Asia’s 10 most-used currencies excluding the yen, lost 0.2 percent. Forecasts Cut The MSCI Asia Pacific Index fell 1.6 percent this week, headed for its lowest close since September 2010. Morgan Stanley and Deutsche Bank AG lowered growth estimates for China, Asia’s biggest economy, this week and Citigroup Inc. cut its projections for U.S. expansion. Chinese Commerce Minister Chen Deming said Aug. 17 that trade growth will slow in the second half as austerity measures cool demand in Western nations. The won led declines in regional currencies today, sliding 0.8 percent, as Financial Supervisory Service Governor Kwon Hyouk Se asked insurers to refrain from paying dividends and boost capital in preparation for a potential crisis. The Singapore dollar slipped 0.1 percent to S$1.2128 this week. The government cut its 2011 exports forecast on Aug. 10, after shipments shrank in July for the first time in three months. The Monetary Authority of Singapore said local money markets are functioning in an “orderly manner” even as short- term interest rates fell into negative territory this month. Thai Growth “Global events are going to play a bigger role over the short term,” said Su Sian Lim, a Singapore-based strategist at Royal Bank of Scotland Group Plc. “The odds are that MAS is going to leave its policy settings untouched” and maintain an appreciation path at its policy review in October, she said. Thailand’s baht gained 0.2 percent to 29.88 per dollar, snapping a run of three weekly declines, before reports next week that are forecast to show economic growth gathered pace in the second quarter and exports rose by the most since June 2010. Gross domestic product increased 3.6 percent from a year earlier in the second quarter, following 3 percent growth in the previous three months, and exports climbed 33 percent in July, based on the median estimates in Bloomberg surveys. The Bank of Thailand will lift its benchmark interest rate by a quarter of a percentage point to 3.5 percent on Aug. 24, according to nine of 10 economists surveyed by Bloomberg. One predicts no change. “The solid economic growth is still intact for Thailand while the new government’s policy is supportive for domestic consumption,” said Kozo Hasegawa, a currency trader at Sumitomo Mitsui Banking Corp. in Bangkok. “However, there continue uncertainties over the global economy and that limits movements in the baht.” Elsewhere, Malaysia’s ringgit gained 0.5 percent this week to 2.9860 and the Philippine peso rose 0.1 percent to 42.583. Taiwan’s dollar was little changed at NT$29.014. and Indonesia’s was also steady at 8,558. 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

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