Asian currencies dropped this week as concern budget deficits in the U.S. and Greece will delay a global economic recovery prompted investors to pull money from riskier assets. The Philippine peso led declines with its biggest weekly loss in almost two months after growth in remittances from citizens living abroad slowed, while China’s yuan pared gains after reaching a 19-year high. President Barack Obama meets Democratic and Republican leaders in Congress today to address the so-called U.S. fiscal cliff, which involves $607 billion of automatic spending cuts and tax increases. Euro-area finance ministers will hold a meeting to discuss aid for Greece. “Stock declines are hurting risk sentiment and investors are selling Asian equities, putting downward pressure on regional currencies,� said Koji Fukaya, president of currency research and consulting company Office Fukaya in Tokyo and a former chief foreign-exchange strategist at Credit Suisse Group AG. “Money will continue to flow into emerging markets and their currencies will recover in the medium- to long-term.� The peso slid 0.6 percent to 41.302 per dollar as of 11:11 a.m. in Manila, according to Tullett Prebon Plc. The Thai baht and Malaysia’s ringgit fell 0.3 percent to 30.74 and 3.0730, respectively. South Korea’s won weakened 0.1 percent to 1,089.11, according to data compiled by Bloomberg. Capital Outflows Global funds sold more local stocks than they bought in Indonesia, South Korea, Taiwan and Thailand this week, exchange data show. Inflows into emerging-market debt slowed to $665 million in the week to Nov. 14, compared with weekly intakes exceeding $1 billion in the past two months, according to a Morgan Stanley report citing data from U.S. research firm EPFR Global. The ringgit weakened as economists predicted Malaysia’s economy grew 4.8 percent in the three months through September from a year earlier, the least in five quarters, according to the median forecast in a Bloomberg News survey. It expanded 5.4 percent in the preceding period. Bank Negara Malaysia will report at 6 p.m. local time today. In Singapore, the economy shrank 5.9 percent in the third quarter from the preceding three months, compared with a 2.9 percent contraction forecast in a Bloomberg survey. The government said today gross domestic product will expand 1 percent to 3 percent in 2013, near the slowest pace in three years. ‘Remain Volatile’ “Risk appetite is tapering as the weak Singapore GDP reflects Asian growth for the third quarter,� said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. (MAY) in Singapore. “Asian currencies are likely to remain volatile because of concern over global growth.� China’s yuan climbed 0.19 percent to 6.2334 per dollar this week, the most in a month. The currency reached a 19-year high of 6.2252 on Nov. 14, having tested the 1 percent upper band of the central bank’s fixing rate every day since Oct. 30. China will expand the Renminbi Qualified Foreign Institutional Investor Program quota by 200 billion yuan ($32 billion) from 70 billion yuan, Guo Shuqing, chairman of the securities regulator, said Nov. 11. The Communist Party unveiled its new leaders yesterday, with Xi Jinping replacing Hu Jintao as party secretary. “China is encouraging inflows of capital as a way to stimulate its economy, which will keep the yuan at a strong level,� said Daniel Chan, executive vice president at Glory Sky Global Markets Ltd. in Hong Kong. “The key uncertainty now is who will be in charge of economic policies in China’s new leadership and how aggressive they are in terms of reforms.� Elsewhere, India’s rupee fell 0.3 percent from a week ago to 54.925 per dollar and Indonesia’s rupiah dropped 0.1 percent to 9,626. Taiwan’s dollar gained 0.1 percent to NT$29.123. Vietnam’s dong was little changed at 20,845. To contact the reporter 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

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