BLBG:Asian Currencies Drop, Led by Won, on Greek Political Tension
Asian currencies fell, led by South Korea’s won and Malaysia’s ringgit, as concern Greece will leave the euro prompted investors to favor safer bets than emerging- market assets.
The Bloomberg-JPMorgan Asia Dollar Index and the MSCI Asia- Pacific Index of shares dropped to their lowest levels since January. Alexis Tsipras, whose Syriza party placed second in Greek elections on May 6, said he would try to form a coalition government of left-wing parties that reject austerity measures needed to secure a European Union-led bailout. The risk of Greece leaving the euro by the end of 2013 has risen to as high as 75 percent, Citigroup Inc. said May 7.
“The main driver of the market is the Greek political situation, which creates a lot of uncertainties in the market,” said Norawit Suparinayok, a foreign-exchange trader at Bangkok Bank Pcl. “Asian currencies may remain weak for now.”
The won declined 0.4 percent to 1,140.10 per dollar as of 12:13 p.m. in Seoul, according to data compiled by Bloomberg. The ringgit slid 0.4 percent to 3.0696. The Philippine peso dropped 0.3 percent to 42.39 and Thailand’s baht weakened 0.1 percent to 31.04. The Asia Dollar Index was down 0.1 percent.
Malaysian Data
The won reached a two-week low of 1,140.32 per dollar as overseas investors sold more Korean shares than they bought for a sixth day. The Bank of Korea will probably leave its benchmark interest rate at 3.25 percent after a policy review tomorrow, according to all 17 economists in a Bloomberg News survey.
“Greece’s political struggle is the main issue in the market today, but declines in the won will be limited with exporters waiting to sell the dollar once the won weakens,” said Lee Yong Hee, a Seoul-based currency dealer at Industrial Bank of Korea.
The ringgit fell for a fifth day, the longest losing streak since mid-March, ahead of data that economists forecast will show Malaysia’s expansion is weakening.
Exports rose 3 percent in March after increasing 14.5 percent in February, according to the median forecast in a Bloomberg News survey before government figures due today. Industrial production growth slowed to 3.3 percent in March from 7.5 percent, a separate poll showed before a report tomorrow.
“We expect these March export and production numbers to reflect the weakening in advanced economies,” said Yeah Kim Leng, chief economist at RAM Holdings Bhd. in Kuala Lumpur. “We will likely see greater headwinds from the negative impact of elections in Europe and that could cast negative sentiment over Asian currencies.”
Elsewhere, Indonesia’s rupiah strengthened 0.1 percent to 9,234 per dollar and Taiwan’s dollar rose 0.1 percent to NT$29.346. China’s yuan traded at 6.3097, little changed from 6.3080 yesterday.
To contact the reporters 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: Sandy Hendry at shendry@bloomberg.net
