Asian currencies completed a weekly decline as concern that Greece will default and a cut to the growth outlook for the world’s largest economy damped demand for emerging-market assets. The Federal Reserve said yesterday the U.S. economy will expand 2.7 percent to 2.9 percent this year, down from April’s forecast of 3.1 percent to 3.3 percent. European Central Bank President Jean-Claude Trichet said June 22 risk signals for financial stability in the euro area are flashing “red” as Greece’s debt crisis threatens to infect banks. Overseas investors pulled $360 million from South Korean, Taiwanese and Thai equities in the first four days of the week. “Uncertainty on the global growth outlook remains,” said Prakriti Sofat, a Singapore-based economist at Barclays Capital. “I think the next point to watch will be June 28 when we have the Greek parliament looking to pass the privatization program.” Thailand’s baht dropped 0.4 percent for the week to 30.68 per dollar as of 3:24 p.m. in Bangkok. India’s rupee declined 0.3 percent to 44.985, Malaysia’s ringgit slipped 0.4 percent to 3.0430 and Indonesia’s rupiah weakened 0.1 percent to 8,603. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, dropped 0.2 percent. European Union leaders pledged yesterday to stabilize the euro-area economy, vowing to stave off a Greek default as long as Prime Minister George Papandreou pushes through a package of budget cuts next week. Papandreou assured European leaders he would deliver the cuts they are demanding in exchange for the next installment of emergency loans and a new rescue package, a Greek government official said. Thai Election Concern The baht has weakened 1.2 percent this month, the worst performance among Asia’s 10 most-traded currencies, as exchange data showed global funds sold $812 million more Thai shares than they bought on concern elections slated for July 3 will spark instability. “The election campaign has been heating up,” said Kozo Hasegawa, a currency trader at Sumitomo Mitsui Banking Corp. in Bangkok. “Investors will stay on the sidelines from here at least until we have a clearer outlook for the post-election situation.” The poll may represent the final chance to rid the country of the “venom” of fugitive former leader Thaksin Shinawatra, Prime Minister Abhisit Vejjajiva said yesterday in a speech to 5,000 supporters in Bangkok. Won Rallies South Korea’s won completed its biggest weekly advance since April as the MSCI Asia-Pacific Index of regional equities gained 1.2 percent today. The currency strengthened 0.7 percent for the week to 1,078.75 per dollar. “The market is relieved about the Greece situation for now as they are making one positive step forward,” said Cho Young Bok, a currency trader at Daegu Bank in Seoul. “Most people think the won is undervalued, but the authorities are protecting the downside” near 1,070 levels, he said. Elsewhere, the Singapore dollar declined 0.1 percent for the week to S$1.2361 against its U.S. counterpart. The Philippine peso climbed 0.6 percent to 43.417, Taiwan’s dollar strengthened 0.1 percent to NT$28.962 and China’s yuan was little changed at 6.4745. To contact the reporter on this story: Khalid Qayum in Singapore at kqayum@bloomberg.net Suryani Omar in Jakarta at somar6@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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