Peso Leads Losses in Asian Currencies on Signs Growth Is Slowing
February 23, 2012, 4:15 AM ESTBy David Yong
Feb. 23 (Bloomberg) -- The Philippine peso led declines in Asian currencies after reports signaled manufacturing shrank in China and Europe, damping demand for emerging-market assets.
The peso and South Korea’s won traded near one-week lows and China’s yuan snapped a two-day advance as Asian stocks retreated from a six-month high. HSBC Holdings Plc and Markit Economics released yesterday a preliminary reading of 49.7 for February of an index measuring output in the world’s second- largest economy. A number below 50 points to a contraction. A similar measure for Europe dropped to 49.7 from 50.4 in January, according to a separate report.
“The Asian recovery story is losing some traction especially with weakening exports and manufacturing data of late,” said Choong Yin Pheng, manager of economic and bond research at Hong Leong Bank Bhd. in Kuala Lumpur. “Demand for risk currencies is affected, given the debt event in Europe.”
The peso fell 0.4 percent to 42.785 per dollar as of 4:30 p.m. in Manila, its biggest loss in a week, according to data compiled by Bloomberg. The won declined 0.3 percent to 1,129.00. Indonesia’s rupiah and the Taiwan Dollar weakened 0.1 percent to 9,073 and NT$29.596, respectively.
Taiwan’s economy grew 1.89 percent last quarter from a year earlier, the slowest pace in more than two years, the statistics bureau reported in Taipei yesterday. China’s Premier Wen Jiabao will target an expansion of less than 8 percent for 2012 in his March 5 report to the National People’s Congress, according to a Bloomberg News survey, compared with a 9.2 percent gain in 2011. Foreign investors have reduced their bond holding in Indonesia this month, according to government data.
Greece Rating
The MSCI Asia-Pacific Index of shares declined 0.1 percent. Fitch Ratings cut Greece’s credit rating by two levels to C from CCC yesterday after euro-area finance ministers handed Greece a 130 billion euros ($172 billion) bailout this week to avert a debt default next month.
“There is uncertainty, and people want to see what will happen next in Greece and the global economy,” said Akira Banno, a treasury adviser at Bank of Tokyo-Mitsubishi UFJ Bhd. in Kuala Lumpur.
The baht rose 0.7 percent to a five-month high of 30.38 against the dollar, strengthening for a fifth day. The currency has advanced 1.7 percent since Feb. 16. Global funds purchased $1.3 billion more Thai equities than they sold in February through yesterday, exchange data showed.
Gains in the currency were limited on concern crude-oil prices near a nine-month high will boost the nation’s import costs. Thailand relies on shipments from abroad to meet 90 percent of its energy needs.
“Fund inflows are boosting the baht,” said Shigehisa Shiroki, chief trader on the Asian and emerging-markets team in Tokyo at Mizuho Corporate Bank. “The near-term outlook for the baht remains uncertain” given higher oil prices and Europe debt risks, he said.
Elsewhere, China’s yuan weakened 0.04 percent to 6.2985 per dollar and Malaysia’s ringgit climbed 0.5 percent to 3.0135, after losing as much as 0.3 percent. India’s rupee and Vietnam’s dong were little changed at 49.24 and 20,833, respectively.
--With assistance from Yumi Teso in Bangkok and Liau Y-Sing in Kuala Lumpur. Editors: Anil Varma, Andrew Janes
%VND %KRW %KRW %USD %SGD %THB %PHP %TWD %IDR %MYR %HKD %CNY
To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.
