BLBG:Asian Currencies Headed for Weekly Drop on Global Growth Concern
Asian currencies headed for the first weekly loss in more than a month after data from the U.S., Europe and China reinforced concern the global economic slowdown is deepening.
More Americans than forecast filed claims for unemployment benefits, according to data released yesterday, while a Chinese manufacturing survey signaled an 11th month of contraction. A gauge of euro-area services and production fell to a 39-month low, another report showed. Bank of Japan (8301) expanded its asset- purchase fund this week by 10 trillion yen ($128 billion), after the Federal Reserve and the European Central Bank announced steps this month that would pump money into financial markets.
“There is concern about the global economic outlook and that’s keeping investors somewhat cautious,” said Kozo Hasegawa, a Bangkok-based foreign-exchange trader at Sumitomo Mitsui Banking Corp. “Still, with quantitative easing by the Fed, there’s optimism about more fund inflows to the region, making the currencies range-bound in recent sessions.”
Malaysia’s ringgit declined 0.8 percent this week to 3.0582 per dollar as of 11:05 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The Philippine peso lost 0.7 percent since Sept. 14 to 41.690, while Indonesia’s rupiah slid 0.6 percent to 9,565. Thailand’s baht fell 0.3 percent to 30.85 per dollar,
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies outside of Japan, dropped 0.1 percent in the past five days, while the MSCI Asia Pacific Index of shares lost 0.2 percent.
China Data
The ringgit headed for the first weekly drop this month after the manufacturing report from China, the second-largest buyer of Malaysian goods in July, dimmed the nation’s export outlook. It gained 0.3 percent today.
“In the current circumstances, the Chinese data aren’t too helpful for risk assets,” said Sacha Tihanyi, a Hong Kong-based senior currency strategist at Scotiabank, a unit of Bank of Nova Scotia. “The same holds for Europe.”
The rupiah was poised for its biggest weekly loss since May on speculation importers stepped up dollar purchases after the Fed’s latest asset-buying plan drove the Indonesian currency to a seven-week high.
The U.S. central bank announced on Sept. 13 that it will start purchasing $40 billion of mortgage debt a month to hold borrowing costs down, a policy known as quantitative easing that boosts the supply of dollars. The rupiah touched 9,447 versus the greenback on Sept. 17, the strongest level since Aug. 1, before declining on each of the following four days.
QE Effect Recedes
“The rupiah halted its rally as the QE effect recedes,” said Putu Andi Wijaya, a foreign-exchange dealer at PT Bank Rakyat Indonesia in Jakarta. “Corporates take any opportunity to buy dollars whenever the rupiah reaches a good level.”
The currency lost 5.2 percent this year, Asia’s biggest exchange-rate loss, amid concern Southeast Asia’s largest economy will have a record current-account deficit this year.
The shortfall in the broadest measure of trade widened to an unprecedented $6.9 billion in the second quarter from $3.2 billion in the previous three months.
Elsewhere in Asia, South Korea’s won declined 0.2 percent to 1,119.51 per dollar, and India’s rupee slipped 0.1 percent to 54.385. China’s yuan appreciated 0.09 percent to 6.3084, while Taiwan’s dollar rose 0.5 percent to NT$29.332. Vietnam’s dong traded at 20,870 compared with 20,850 a week ago.
To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net; Yumi Teso in Bangkok at yteso1@bloomberg.net.
To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net
