Won Leads Weekly Drop in Asia Currencies on U.S. Growth Concern
August 27, 2010, 5:25 AM EDT
By Lilian Karunungan
Aug. 27 (Bloomberg) -- Asian currencies declined this week, led by South Korea’s won, on concern demand for the region’s exports will weaken as the economic recovery in the U.S. falters.
The Bloomberg-JPMorgan Asia Dollar Index dropped 0.2 this week as economists predicted government data due today will show the U.S. economy grew less than originally estimated in the second quarter. Investors withdrew $7.1 billion from global equity funds in the week to Aug. 25, including $289 million from Asia ex-Japan stock funds, Cambridge, Massachusetts-based research firm EPFR Global said in an e-mail.
“The impact of the weaker outlook may have some repercussions for largely export-oriented economies,” said Joey Cuyegkeng, a Manila-based economist at ING Groep NV, the largest Dutch financial services company. “Once the weak data in the developed economies are out and have been discounted, I think investors will flood back into Asia.”
The South Korean won slid 1.1 percent this week to 1,196.76 per dollar at the 3 p.m. close in Seoul as overseas investors sold $143 million more South Korean shares than they bought. The Indian rupee declined 0.5 percent to 46.91, the Philippine peso lost 0.4 percent to 45.195, and the Indonesian rupiah dropped 0.5 percent to 9,020.
Imported Uncertainty
“There’s a lot of uncertainty being imported from the U.S., and the picture remains one of nervousness on the potential impact of the U.S. slowdown on Asia,” said Robert Minikin, a senior foreign-exchange strategist at Standard Chartered Plc in Hong Kong. “We are looking for an even weaker-than-consensus U.S. GDP number tonight.”
India’s rupee dropped this week as dollar purchases by the nation’s oil refiners helped drag the currency lower, said Sudarshan Bhatt, chief foreign-exchange trader at state-owned Corporation Bank.
“Global growth concerns are weighing on the minds of investors and keeping capital flows choppy,” said Mumbai-based Bhatt. “Usual month-end dollar demand is also there.”
Malaysia’s ringgit had a weekly loss on speculation a slowdown in two of the nation’s biggest export markets will deter the central bank from further raising interest rates this year.
The currency’s 9 percent rally against the dollar so far this year stalled this week after reports showed the U.S. housing market slumped in July and manufacturing output in Singapore cooled. Singapore is Malaysia’s largest export market, while the U.S. is its fourth largest.
“The global picture is not so good and it’s contributing to the subdued sentiment this week,” said Hasdi Mamat, a foreign-exchange trader at Bank Muamalat Malaysia Bhd. in Kuala Lumpur. “We see the market taking a breather before the economic situation shows improvement.”
Rate Outlook
Industrial production in Malaysia grew 9.4 percent in June, the slowest pace since February, the government said on Aug. 10. Output in Singapore expanded 9.9 percent in July, the least in eight months, a government report yesterday showed.
The ringgit dropped 0.2 percent to 3.1465 in the past five days.
The peso declined on concern earnings from tourism may slow after a bus hijacking resulted in the death of eight Hong Kong tourists.
At least 558 travelers to the country have canceled flights from Hong Kong, Beijing, Xiamen and other points of China as of Aug. 25, Philippine Airlines Inc. President Jaime Bautista said yesterday. The bus siege earlier this week by a police officer protesting his dismissal for extortion “will impact negatively” on tourism, Philippine President Benigno Aquino said on Aug. 25.
Elsewhere, Taiwan’s dollar dropped 0.3 percent this week to NT$32.03 against its U.S. counterpart and the Chinese yuan fell 0.1 percent to 6.7974.
August 27, 2010, 5:25 AM EDT
By Lilian Karunungan
Aug. 27 (Bloomberg) -- Asian currencies declined this week, led by South Korea’s won, on concern demand for the region’s exports will weaken as the economic recovery in the U.S. falters.
The Bloomberg-JPMorgan Asia Dollar Index dropped 0.2 this week as economists predicted government data due today will show the U.S. economy grew less than originally estimated in the second quarter. Investors withdrew $7.1 billion from global equity funds in the week to Aug. 25, including $289 million from Asia ex-Japan stock funds, Cambridge, Massachusetts-based research firm EPFR Global said in an e-mail.
“The impact of the weaker outlook may have some repercussions for largely export-oriented economies,” said Joey Cuyegkeng, a Manila-based economist at ING Groep NV, the largest Dutch financial services company. “Once the weak data in the developed economies are out and have been discounted, I think investors will flood back into Asia.”
The South Korean won slid 1.1 percent this week to 1,196.76 per dollar at the 3 p.m. close in Seoul as overseas investors sold $143 million more South Korean shares than they bought. The Indian rupee declined 0.5 percent to 46.91, the Philippine peso lost 0.4 percent to 45.195, and the Indonesian rupiah dropped 0.5 percent to 9,020.
Imported Uncertainty
“There’s a lot of uncertainty being imported from the U.S., and the picture remains one of nervousness on the potential impact of the U.S. slowdown on Asia,” said Robert Minikin, a senior foreign-exchange strategist at Standard Chartered Plc in Hong Kong. “We are looking for an even weaker-than-consensus U.S. GDP number tonight.”
India’s rupee dropped this week as dollar purchases by the nation’s oil refiners helped drag the currency lower, said Sudarshan Bhatt, chief foreign-exchange trader at state-owned Corporation Bank.
“Global growth concerns are weighing on the minds of investors and keeping capital flows choppy,” said Mumbai-based Bhatt. “Usual month-end dollar demand is also there.”
Malaysia’s ringgit had a weekly loss on speculation a slowdown in two of the nation’s biggest export markets will deter the central bank from further raising interest rates this year.
The currency’s 9 percent rally against the dollar so far this year stalled this week after reports showed the U.S. housing market slumped in July and manufacturing output in Singapore cooled. Singapore is Malaysia’s largest export market, while the U.S. is its fourth largest.
“The global picture is not so good and it’s contributing to the subdued sentiment this week,” said Hasdi Mamat, a foreign-exchange trader at Bank Muamalat Malaysia Bhd. in Kuala Lumpur. “We see the market taking a breather before the economic situation shows improvement.”
Rate Outlook
Industrial production in Malaysia grew 9.4 percent in June, the slowest pace since February, the government said on Aug. 10. Output in Singapore expanded 9.9 percent in July, the least in eight months, a government report yesterday showed.
The ringgit dropped 0.2 percent to 3.1465 in the past five days.
The peso declined on concern earnings from tourism may slow after a bus hijacking resulted in the death of eight Hong Kong tourists.
At least 558 travelers to the country have canceled flights from Hong Kong, Beijing, Xiamen and other points of China as of Aug. 25, Philippine Airlines Inc. President Jaime Bautista said yesterday. The bus siege earlier this week by a police officer protesting his dismissal for extortion “will impact negatively” on tourism, Philippine President Benigno Aquino said on Aug. 25.
Elsewhere, Taiwan’s dollar dropped 0.3 percent this week to NT$32.03 against its U.S. counterpart and the Chinese yuan fell 0.1 percent to 6.7974.