BLBG:Asia Currencies Drop as Weak U.S., Europe Data Deter Risk-Taking
Asian currencies fell, led by India’s rupee, after reports showing U.S. companies added the fewest workers in seven months and euro-area unemployment rose to a 15- year high cooled demand for riskier assets.
The rupee sank to a four-month low and South Korea’s won retreated from a one-month high as the MSCI Asia-Pacific excluding Japan Index of shares dropped for the first time in eight days. U.S employers hired 119,000 workers last month, compared with a median forecast for 170,000 additions in a Bloomberg survey, data showed yesterday. The euro-area jobless rate rose to 10.9 percent in March, the highest since April 1997, the European Union announced.
“Asian currencies are not on the firm side with risk aversion driving the dollar strength,” said Irene Cheung, a Singapore-based currency strategist at Australia & New Zealand Banking Group. “The euro-area data is clearly weakening and we still expect to see a period of consolidation in U.S. numbers.”
The rupee slumped 0.6 percent to 53.30 per dollar as of 1:51 p.m. in Mumbai, according to data compiled by Bloomberg. It touched 53.31, the weakest level since Jan. 2. The won closed 0.1 percent lower at 1,129.03, while Thailand’s baht fell 0.1 percent to 30.91.
The Bloomberg-JPMorgan Asia Dollar Index declined for a third day, with its 60-day volatility declining to 2.73 percent from 2.80 percent. The MSCI Asia-Pacific excluding Japan Index dropped 0.3 percent.
“Growth concerns are causing some panic in the market that the rupee may fall much further,” said Kamlakar Rao, head of foreign-exchange trading in Mumbai at state-run Allahabad Bank. “We are seeing importers buying dollars and corporates hedging foreign-currency loans.”
Geithner in China
The yuan rose 0.03 percent to 6.3050 per dollar, reversing an earlier loss, after Commerce Minister Chen Deming told reporters in Beijing that China had a trade surplus of more than $10 billion in April. U.S. Treasury Secretary Timothy F. Geithner and Secretary of State Hillary Clinton are in Beijing for an economic dialogue that started today and may include discussion of China’s exchange-rate policy and trade imbalances.
The People’s Bank of China weakened its reference rate 0.04 percent today to 6.2697 per dollar, after strengthening it 0.53 percent in the four trading days leading up to the discussions.
Elsewhere, Indonesia’s rupiah strengthened 0.1 percent to 9,200 per dollar and Taiwan’s dollar declined 0.1 percent to NT$29.266. Malaysia’s ringgit traded at 3.0280 from 3.0287 yesterday, while the Philippine peso was steady at 42.177.
To contact the reporters 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
