Bloomberg News

Asian Currencies Drop for Fifth Week on China Slowdown, Europe

June 01, 2012

Asian currencies fell for a fifth week, the longest losing streak since June 2009, after economic reports in the U.S. and China added to global slowdown signs and Europe’s debt crisis escalated.

The Bloomberg-JPMorgan Asia Dollar Index slid 0.6 percent, capping a 2.6 percent slump since April 27, as India’s rupee sank to an all-time low and Taiwan’s dollar completed the biggest weekly loss since September. Manufacturing in China grew last month at the slowest pace this year, trailing 26 of 27 estimates in a Bloomberg survey, according to an index published by the statistics bureau and logistics federation yesterday.

“The manufacturing data has surprised even when expectations have been lowered, especially with weak new orders and import trends,” said Irene Cheung, a Singapore-based currency strategist at Australia & New Zealand Banking Group. “Market sentiment is very poor and the Europe situation remains dire.”

Malaysia’s ringgit fell 1.8 percent this week to 3.2100 per dollar in Kuala Lumpur, according to data compiled by Bloomberg. India’s rupee slumped 0.4 percent to 55.5850, Taiwan’s dollar slid 0.9 percent to NT$29.931 and Thailand’s baht lost 0.7 percent to 31.90. China’s yuan declined 0.4 percent to 6.3690, its biggest drop since January.

The Chinese manufacturing report followed data May 31 that showed more Americans applied for jobless benefits in the week ended May 26 and private employment climbed 133,000 in May, compared with the median estimate of 150,000 in a Bloomberg News survey.

Stock Outflows

A global slowdown and speculation Greece will exit the 17- nation euro wiped $4.5 trillion in market value from global stocks in May. Global funds pulled $7.3 billion from equities in South Korea and Taiwan last month, exchange data show. Foreigners also sold $825 million more Indonesian shares than they bought and took $470 million out of Thai stocks.

“There is concern about the export outlook with some slowdown not only in Europe but also in China,” said Kozo Hasegawa, a Bangkok-based trader at Sumitomo Mitsui Banking Corp.

The Asia Dollar Index touched 113.74 May 31, the lowest level since September 2010. The rupee lost 6 percent in May and touched a record-low of 56.515 per dollar May 31, when the government reported economic growth of 5.3 percent for the last quarter, the slowest expansion in nine years.

Philippine Growth

Indonesia’s rupiah fell 0.6 percent to 9,528 per dollar this week in Jakarta, after reaching 9,643 May 31 that marked the lowest level since October 2009. Offshore investors cut government debt holdings by 4.3 trillion rupiah ($452 million) in May, according to finance ministry data on May 30.

The Philippine peso strengthened 0.8 percent this week to 43.393 per dollar. Moody’s Investors Service raised the nation’s credit rating outlook to positive on May 29 and data showed May 31 that the economy grew 6.4 percent in the three months through March, faster than the 4.3 percent expansion forecast in a Bloomberg survey.

Elsewhere, South Korea’s won gained 0.7 percent to 1,177.83 per dollar and Vietnam’s dong fell 0.1 percent to 20,870.

To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.


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