BLBG:Asian Currencies Drop, Led by Baht, as Europe Debt Woes May Hurt Exports
Asian currencies weakened, led by Thailand’s baht, as a sovereign-debt crisis will pull Europe into a recession dimmed the outlook for exports.
The Bloomberg-JPMorgan Asia Dollar Index (ADXY) dropped for a second day and the baht sank to a 17-month low. The MSCI Asia- Pacific Index of shares declined as Spain and Italy prepare to sell more debt amid credit-rating concerns. Data today is forecast to show industrial output in the euro zone shrank for a third month in November.
“Concern over Europe’s debt crisis is intensifying, making it hard for investors to take risks,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo. “Such concern also hurts the outlook for Asian exports, weighing on currencies.”
The baht fell 0.2 percent to 31.81 per dollar as of 9:56 a.m. in Bangkok, according to data compiled by Bloomberg. South Korea’s won weakened 0.1 percent to 1,157.50 and the Indonesian rupiah lost 0.5 percent to 9,208.
Industrial production in the euro region contracted 0.3 percent in November from the previous month, according to the median forecast in a Bloomberg News survey before the European Union’s statistics office releases the figures. The European Central Bank will keep its benchmark interest rate at 1 percent at a policy meeting today, a separate survey showed.
Debt Sales
Spain will auction as much as 5 billion euros ($6.4 billion) of bonds due 2015 and 2016 today, while Italy is scheduled to sell 12 billion euros of bills. Fitch Ratings lowered its rating outlook for France in December and put Spain and Italy on review for a downgrade.
“Ahead of big events like auctions in Italy and Spain and also the central bank’s rate meeting at home, traders don’t want to go for sizable positions,” said Lee Jung Hyun, a Seoul-based currency dealer at Industrial Bank of Korea.
The rupiah slipped for a fourth day before Indonesia’s central bank reviews interest rates today. Policy makers will keep the reference rate at 6 percent, according to 13 of 18 economists in a Bloomberg survey. Five predict a cut to 5.75 percent. The Bank of Korea will review borrowing costs tomorrow and is expected to keep its benchmark rate at 3.25 percent for a seventh month, based on all 14 estimates in a Bloomberg poll.
China Inflation
Reports this week showed Malaysia’s exports and industrial production grew in November at the slowest pace in four months, while Philippine exports dropped for a seventh month. China and Taiwan released December trade figures showing the smallest gains in shipments since 2009.
China’s yuan weakened for a seventh day, the longest losing streak since 2006, as government data today showed inflation slowed for a fifth month. The currency fell 0.1 percent to 6.3219 per dollar, contributing to a 0.44 percent loss since December. A 0.48 percent drop in August 2010 was the biggest monthly slide since January 1994.
Consumer prices rose 4.1 percent in December from a year earlier, the National Bureau of Statistics said in Beijing today. That compares with the median estimate of 4 percent in a Bloomberg News survey of 26 economists and a gain of 4.2 percent in November.
Elsewhere, the Malaysian ringgit declined 0.1 percent to 3.1425 and the Philippine peso lost 0.1 percent to 44.01. Taiwan’s dollar climbed 0.1 percent to NT$29.957 and earlier touched NT$29.88, the strongest level since Nov. 1.
To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net; Yumi Teso in Bangkok at yteso1@bloomberg.net.
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
