BLBG:Asia Currencies Drop as Greek Concern Lingers and Oil Reaches 9-Month High
Asian currencies fell for a second day, led by South Korea’s won and the Philippine peso, after fresh financial aid for Greece failed to allay concern Europe’s debt crisis will slow global growth.
The won snapped a three-day advance and the MSCI Asia- Pacific Index of shares fell after euro-area finance ministers handed Greece a 130 billion-euro ($172 billion) lifeline to avoid a March bankruptcy. Oil prices reached a nine-month high yesterday, stoking speculation inflation will accelerate and potentially limit the scope for monetary-policy easing. China’s manufacturing probably contracted for a fourth month in February, an HSBC Holding Plc preliminary gauge indicated.
“The market is relieved but still skeptical about the implementation progress in Greece,” said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd. “There is also renewed worry about the high oil prices, which are a threat to growth.”
The won declined 0.3 percent to 1,126.20 per dollar as of 11:44 a.m. in Seoul, according to data compiled by Bloomberg. The peso weakened 0.3 percent to 42.78 and Indonesia’s rupiah fell 0.1 percent to 9,060. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region 10 most-active currencies excluding the yen, dropped 0.1 percent.
Bank of England Deputy Governor Charlie Bean said yesterday Greece’s second bailout may not be enough to end the debt crisis. Economists at Citigroup Inc. and Commerzbank AG said the debt- stricken nation may fail to deliver on promised austerity cuts amid social unrest and looming elections.
Oil Supply
Oil for April delivery reached $106.07 per barrel yesterday, the highest level since May 5, on concern supply will decline after Iran cut exports to France and Britain on Feb. 20, preempting a European Union ban. Policy makers in Indonesia, Philippines and Thailand have lowered benchmark interest rates this year to revive economic growth, while China and India have cut banks’ reserve-requirement ratios in the past three months.
“One of the main concerns in 2012 is essentially imported inflation rising in Asia, essentially from the increase in oil prices,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. in Singapore.
The Thai baht bucked the weakening trend, advancing for a fourth day. International investors bought $1.1 billion more local stocks than they sold this month and purchased a net $3.6 billion of government bonds, stock exchange and Thai Bond Market Association data show. The currency rose 0.1 percent to 30.71 per dollar.
“Funds are coming into Thailand a lot so far this year, providing support for the baht,” said Disawat Tiaowvanich, a currency trader at Bangkok Bank Pcl.
Elsewhere, the Singapore dollar slipped 0.3 percent to S$1.2596 versus the greenback. Taiwan’s dollar and China’s yuan were little changed at NT$29.574 and 6.2965, respectively. Vietnam’s dong climbed 0.2 percent to 20,835.
To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net
To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net
