Asian currencies weakened for the first time in three days, led by Thailand’s baht, on speculation regional policy makers will counter appreciation as China slows yuan gains. The Bloomberg-JPMorgan Asia Dollar Index slipped 0.l percent from a one-week high after data yesterday showed sales of U.S. existing homes jumped a record 10 percent in September, weakening the case for the Federal Reserve to print more money to spur economic growth. China should resist pressure from the U.S. and Europe to let its currency appreciate, Wang Yong, a central bank researcher wrote in a commentary in Shanghai Securities News today. The report from China “has driven down expectations for yuan appreciation,” said Wai Ho Leong, a Singapore-based senior regional economist at Barclays Plc. “The U.S. existing home sales were a surprise and that supported the dollar. We’re still in a bullish Asian world since growth prospects and balance of payments flows are so supportive of Asian currencies.” The baht fell 0.2 percent to 29.90 per dollar as of 3:42 p.m. in Bangkok, according to data compiled by Bloomberg. The Indian rupee weakened 0.2 percent to 44.44 and the Singapore dollar declined 0.2 percent to S$1.2944. The report from China comes after the Group of 20 nations vowed on Oct. 23 to let markets determine foreign-exchange rates, seeking to deter countries from weakening their currencies to support exports. Hot Money Attraction China should also avoid raising interest rates again this year because doing so would attract speculative “hot money” into the currency, Wang, a professor at the People’s Bank of China’s training school wrote. The yuan fell 0.06 percent to 6.6620 in Shanghai, trimming this month’s advance to 0.4 percent. September’s 1.74 percent gain was the biggest advance since a peg ended in July 2005. The baht dropped on concern the government will unveil more measures to slow fund inflows after the currency strengthened to a 13-year high this month. Policy makers are “keeping an eye” on speculative capital inflows as increasing foreign purchases of local bonds lead to gains in the baht, Finance Minister Korn Chatikavanij said in an interview yesterday. The baht has appreciated 11.4 percent against the dollar this year, the best performance in Asia outside Japan, as exchange data show overseas investors bought $1.9 billion more Thai equities than they sold. Additional Measures “It’s possible to see additional measures to slow inflows such as imposing a minimum-holding period,” said Minori Uchida, a senior analyst in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd. “Such concerns may discourage people from aggressively buying the baht for now.” The Bank of Thailand is studying further measures aimed at reducing the baht’s volatility and is monitoring the foreign- exchange rate, Governor Prasarn Trairatvorakul said last week. The government this month removed a 15 percent tax exemption for foreigners on income from domestic bonds. India’s rupee fell on speculation the nation’s importers will step up foreign-exchange purchases to settle month-end bills, said Sudarshan Bhatt, Mumbai-based chief foreign-exchange trader at state-owned Corporation Bank. South Korea’s won fell 0.1 percent to 1,116.76 per dollar, paring an earlier 0.4 percent decline after the Asia Development Bank said the currency remains undervalued compared with its level before the global financial crisis. Data due tomorrow is forecast to show economic growth in South Korea slowed in the third quarter. Elsewhere, Indonesia’s rupiah weakened 0.1 percent to 8,913 against the greenback and Taiwan’s dollar dropped 0.1 percent to NT$30.76. Malaysia’s ringgit slipped 0.1 percent to 3.0975, while the Philippine peso rose 0.4 percent to 43.125. To contact the reporters on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net. To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.

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