Asian currencies are headed for their biggest weekly loss since September on signs economic growth is faltering as European policy makers struggle to contain the region’s debt crisis.
The Bloomberg-JPMorgan Asia Dollar Index fell for a third week. South Korea’s won and India’s rupee led declines after data this month showed manufacturing slowed in China and Japan and exports slumped in Singapore and the Philippines. Singapore and the Philippines have trimmed growth forecasts this quarter and Indonesia unexpectedly cut interest rates by half a percentage point last week.
“The uncertainty that has been endemic from the turn of the year will continue to persist into year-end, especially with a resolution to the euro zone’s crisis appearing to be a long way off,” Mitul Kotecha, head of global currency strategy at Credit Agricole CIB in Hong Kong, wrote in a report released today. “Commodities and emerging-market currencies will remain under pressure” in the short term, he wrote.
The won dropped 0.7 percent this week to 1,134.32 per dollar as of 11:22 a.m. in Seoul, according to data compiled by Bloomberg. The rupee slid 1.6 percent to 50.905 and Indonesia’s rupiah weakened 0.6 percent to 9,025.
Asian equities fell for a fourth day, tracking losses in global markets, after borrowing costs jumped in Spain and France. New York-based Fitch Ratings said in a Nov. 16 statement that the outlook for the U.S. banking industry could worsen without a timely resolution of European government finances.
Falling Exports
Singapore’s dollar fell 0.4 percent to $1.2945 against its U.S. counterpart. Exports fell 16.2 percent in October from a year earlier, the worst performance in 30 months, the government said yesterday. Shipments shrank 27 percent in the Philippines, the most since April 2009.
Thailand’s baht declined 0.4 percent to 30.97 per dollar. The worst floods in almost 70 years have thumped consumer confidence, which dropped to a decade-low of 62.8 in October, according to data from the University of the Thai Chamber of Commerce. The floods may cost as much as 400 billion baht ($12.9 billion), according to Barclays Capital. The U.K. lender cut its growth forecast for Thailand to 2.4 percent for 2012, from 4.5 percent.
“The final quarter growth numbers are almost set to show contraction and that’s what the market is going to be looking for,” said Gundy Cahyadi, an economist at Oversea-Chinese Banking Corp. in Singapore.
Forecasts Trimmed
India’s rupee approached 51 per dollar this week, a level last seen in March 2009. Industrial production grew 1.9 percent in September, the least in two years, data showed on Nov. 11.
Indonesia cut its 2012 growth forecast this week to 6.5 percent from 6.7 percent. The Philippines lowered its 2011 growth forecast to between 4.5 percent and 5.5 percent last month, down from the previous estimate of 5 percent to 6 percent.
China’s yuan fell 0.16 percent to 6.3528 per dollar in Shanghai for a second weekly decline. The yuan may face depreciation in two years as the country’s trade surplus may account for less than 1.6 percent of gross domestic product this year, Li Daokui, an adviser to the People’s Bank of China, said in Beijing today.
Elsewhere, Malaysia’s ringgit weakened 0.3 percent to 3.1598 per dollar. Taiwan’s dollar dropped 0.1 percent to NT$30.219 and the Philippine peso declined 0.1 percent to 43.335.
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
