Bloomberg News

Won Leads Drop in Asian Currencies

April 09, 2012

South Korea’s won and India’s rupee led losses in Asian currencies as weaker-than-expected U.S. jobs data damped the outlook for the world’s biggest economy, sapping demand for riskier assets.

The MSCI Asia-Pacific Index (MXAP) of shares fell for a fourth day after a government report on April 6 showed U.S. employers added 120,000 jobs in March, less than the 205,000 median estimate in a Bloomberg survey. Chinese consumer prices increased 3.6 percent in March from a year earlier, compared with the 3.4 percent median forecast in a Bloomberg poll, data showed today.

“Disappointment over the U.S. data is spurring some risk- averse sentiment in the market,” Thomas Harr, the Singapore- based head of Asian foreign-exchange strategy at Standard Chartered Plc, said in an e-mailed reply to questions. “China’s CPI was slightly higher than expected which will reduce easing expectations, which is also not good for risk sentiment.”

The won weakened 0.6 percent to 1,138.32 per dollar at the 3 p.m. close in Seoul, according to data compiled by Bloomberg. The rupee fell 0.4 percent to 51.2850, Malaysia’s ringgit dropped 0.3 percent to 3.0725 and Indonesia’s rupiah lost 0.1 percent to 9,176. Financial markets in the Philippines and Thailand are closed today for holidays.

The Bloomberg-JPMorgan Asia Dollar Index (ADXY), which tracks the region’s 10 most-used currencies excluding the yen, fell 0.1 percent. The gauge’s 60-day historical volatility dropped to 3.32 percent from 3.36 percent at the end of last week.

North Korea Risk

The won touched its weakest level this month as reports North Korea is preparing for a rocket launch and a nuclear weapons test heightened geopolitical risks on the peninsula. The North announced last month through state media that it intends to fire a long-range rocket to put a satellite in orbit between April 12 and April 16. North Korea appears to be readying a nuclear weapons test to follow a long-range rocket launch, according to a report by South Korean intelligence officials.

“Reports that North Korea may launch a rocket near the end of this week is tilting market sentiment toward a weaker won,” said Ryoo Hyun Jung, the Seoul-based chief currency dealer at Citibank Korea Inc.

The yuan slipped 0.02 percent to 6.3077 per dollar after the People’s Bank of China set its reference rate 0.08 percent stronger at 6.3021. The currency is allowed to trade 0.5 percent on either side of the daily fixing.

“The CPI number was very high and disappointing,” said Ju Wang, a rates strategist at Barclays Capital in Singapore. “It’s bad for sentiment as it may delay a reserve-requirement cut.” Barclays has predicted a reduction this month.

Elsewhere, the Taiwan dollar advanced 0.1 percent to NT$29.530 against its U.S. counterpart. Vietnam’s dong was steady at 20,835.

To contact the reporters on this story: Jiyeun Lee in Seoul at jlee1029@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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