BLBG:Asian Currencies Decline, Led by Rupee and Baht, on Concern Growth Slowing
India’s rupee and Thailand’s baht led declines among Asian currencies this week on signs economic growth is slowing in the region and speculation cooled that the Federal Reserve will unveil further stimulus measures.
Taiwan’s industrial output rose less than estimated last month and consumer confidence in South Korea fell to the least since March this month, reports showed this week. The U.S. economy grew at a 1 percent annual rate in the second quarter, compared with a previous estimate of 1.3 percent, according to the median forecast of economists in a Bloomberg survey. The Dollar Index traded on ICE Futures in New York fell this week before a speech yesterday by Fed Chairman Ben S. Bernanke.
“The market is priced for disappointing news, judging by the price action, given the Fed has limited options,” said Lam Chee Mun, a fund manager in Kuala Lumpur at TA Investment Management Bhd. that manages about $200 million. “Risk appetite is damped” by slowdown concerns, he said.
Bernanke said yesterday the U.S. central bank still has tools to stimulate an economic recovery, without giving details. The recovery is likely to improve in the second half of this year, he told an annual forum in Jackson Hole, Wyoming.
The Bloomberg-JPMorgan Asia Dollar Index had a second weekly drop. The index was at 119.11 in Singapore yesterday, compared with 119.22 at the end of last week.
The baht slid 0.5 percent this week to 29.98 per dollar in Bangkok, according to data compiled by Bloomberg. The rupee fell 0.9 percent to 46.1575.
Growth Outlook
Singapore reported yesterday that annual growth in industrial production slowed to 7.4 percent in July following a revised 10.7 percent increase a month earlier.
Thomas Hoenig, president of the Federal Reserve Bank of Kansas City which hosted the meeting in Jackson Hole yesterday, told Bloomberg TV on Aug. 25 there’s a limit to how much more the central bank can do to help the U.S. economy. The global economy has a 50 percent chance of slipping into recession as Europe and the U.S. struggle to grow, Nobel laureate Michael Spence said in a Bloomberg Television interview in Hong Kong on Aug. 25.
India’s rupee completed a fourth weekly decline, taking its drop for the month to 4.2 percent. Global investors have reduced holdings of the nation’s shares by $2 billion this month on concern Asia’s third-biggest economy is slowing. Gross domestic product rose 7.6 percent in the three months ended June, the least in six quarters, according to the median forecast of economists in a Bloomberg survey before official data due on Aug. 30.
‘Quite Solid’
The baht touched 29.98 per dollar yesterday. International funds sold $471 million more Thai shares than they bought this week through Aug. 25, taking net sales this month to $1.2 billion, exchange data show. The currency may be supported by official data released on Aug. 25 that showed exports rose 38.3 percent in July from a year earlier, the most in 13 months, according to Mizuho Corporate Bank Ltd.
“The global economic uncertainties are making investors risk averse and put downward pressure on Asian currencies through stock sales,” said Shigehisa Shiroki, chief trader on the Asian and emerging-markets team at Mizuho Corporate Bank in Tokyo. “Money may eventually return to Thailand as its economy looks quite solid.”
Elsewhere, the ringgit fell 0.2 percent this week to 2.9888 per dollar and Indonesia’s rupiah declined 0.1 percent to 8,569, according to data compiled by Bloomberg. Singapore’s dollar rose 0.4 percent to S$1.2069, the won advanced 0.4 percent to 1,082.50 and the Philippine peso gained 0.3 percent to 42.455. China’s yuan rose 0.1 percent to 6.3872 and Taiwan’s dollar dropped 0.2 percent to NT$29.06.
To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
