Asian currencies fell, led by the Philippine peso and South Korea’s won, on concern a faltering recovery in the U.S. will undermine export-led growth among regional economies. The MSCI Asia-Pacific Index dropped after U.S. Federal Reserve Chairman Ben S. Bernanke said yesterday the economic outlook remains “unusually uncertain.” The world’s largest economy is the biggest export market for China and India, and the No. 1 source of remittances to the Philippines. “The outlook for the U.S.-led global economy has darkened following Bernanke’s remarks,” said Satoshi Okagawa, head of the foreign exchange and money trading group in Singapore at Sumitomo Mitsui Banking Corp., a unit of Japan’s second-largest bank by market value. “Risk aversion prevails, with emerging currencies being sold.” The Philippine peso declined 0.3 percent to 46.61 per dollar as of 12:32 p.m. in Manila, according to data compiled by Bloomberg, and the won slid 0.2 percent to 1,206.45. Malaysia’s ringgit fell 0.2 percent to 3.2225. Bernanke said the Fed is prepared “to take further policy actions as needed” to lift growth in the U.S., commenting before reports today that are forecast to show initial jobless claims increased and existing home sales dropped. U.S. central bankers cut their forecast for growth this year to a range of 3 percent to 3.5 percent, versus 3.2 percent to 3.7 percent in April, according to the minutes of their meeting in June released on July 14. Growth Forecast The Philippine peso dropped for a second day. Demand for the nation’s electronics exports may ease starting in the third quarter, Semiconductor and Electronics Industries of the Philippines Inc. President Ernesto Santiago said last week. Shipments of electronics goods account for more than half of Philippine exports, and the U.S. buys more than 16 percent of the nation’s overall shipments. South Korea’s currency slipped as the benchmark Kospi Index dropped. The won is Asia’s worst-performing currency this year, underscoring concern the nation’s exports will slow. Overseas shipments account for about half of the region’s fourth-largest economy. The South Korean economy grew 1.3 percent between April and June after having expanded 2.1 percent in the first quarter, according to the median estimate of economists in a Bloomberg survey before data due on July 26. Rate Outlook Malaysia’s ringgit slipped for the first time in three days. A government report released after the close of markets yesterday showed consumer prices rose 1.7 percent in June from a year earlier, versus 1.6 percent in May. That was below the central bank’s forecast for an average increase of 2 percent to 2.5 percent this year. Bank Negara Malaysia lifted its overnight policy rate by a quarter of a percentage point to 2.75 percent on July 8. The benchmark rate was at a record-low 2 percent in March. Policy makers will hold their remaining meetings of this year on Sept. 2 and Nov. 12. “There’s no pressure or impetus for the central bank to act,” said Calbert Loh, head of treasury in Kuala Lumpur at Bangkok Bank Bhd. “They should have enough cushion now after three rounds of increases this year.” Yuan forwards dropped to the weakest level in a month on speculation China’s slowing economy will prompt the central bank to limit gains in the currency. ‘Bearish Sentiment’ “The weaker yuan forwards reflect bearish sentiment about the economic outlook in both the U.S. and China,” said Irene Cheung, director of local-markets trading at Royal Bank of Scotland Group Plc in Singapore. “Investors were cautious and bought back the dollar to reduce risks.” A government report issued on July 15 showed China’s economy expanded 10.3 percent in the second quarter, slowing from growth of 11.9 percent in the previous three months. Inflation cooled to 2.9 percent in June from 3.1 percent in the previous month. The 12-month non-deliverable forward slid 0.2 percent to 6.7175, the weakest level since June 17. Elsewhere, the Singapore dollar dropped 0.1 percent to S$1.3766, and the Thai baht declined 0.1 percent to 32.33. The Indonesian rupiah traded at 9,067 from 9,063 yesterday.

Source