Asian Currencies Weaken as European Debt Crisis Outweighs U.S. Jobs Data
Most Asian currencies fell, led by South Korea’s won, as concern Europe’s debt crisis will worsen countered an improvement in U.S. jobs data.
The Bloomberg-JPMorgan Asia Dollar Index dropped after David Riley, London-based head of the sovereign-debt unit at Fitch Ratings, said yesterday that Italy faces a “significant chance” of a downgrade. Malaysia’s export growth slowed for a second month in November, a government report showed today, after the U.S. Labor Department said employers took on 4.15 million workers in November, 107,000 more than the prior month.
“It’s difficult for investors to bet on riskier assets, just relying on positive economic data from the U.S.,” said Lee Jung Hyun, a Seoul-based currency trader at Industrial Bank of Korea. “There’s tension in the market regarding Europe.”
The won fell 0.2 percent to 1,158.78 per dollar in Seoul and Malaysia’s ringgit weakened 0.2 percent to 3.1390, according to data compiled by Bloomberg. Indonesia’s rupiah was little changed at 9,158 after earlier falling as much as 0.7 percent.
Indonesia’s central bank holds its interest-rate review tomorrow, at which 13 of 18 economists surveyed by Bloomberg forecast the reference rate will be kept at 6 percent. Five predict a quarter of a percentage point cut.
China Slowdown
Capital flows into Asia are expected to fluctuate more than they did in 2011 because of concerns about Europe’s debt crisis and China’s economic slowdown, Bank of Thailand Assistant Governor Pongpen Ruengvirayudh said yesterday. Malaysia’s exports grew at the slowest pace in four months in November, today’s data showed, after China reported yesterday that imports increased by the least in two years in December.
Shipments from Malaysia rose 8 percent from a year earlier, after gaining a revised 15.4 percent in October, according to the trade ministry. Industrial production climbed 1.8 percent, the least since July, data showed yesterday. The median estimate in a Bloomberg survey was for a 3.5 percent gain.
“Malaysia’s growth is likely to get slower,” said Enrico Tanuwidjaja, a Singapore-based senior currency analyst at Malayan Banking Bhd.
Thailand’s baht approached a 16-month low after international investors sold $57 million more local shares than they bought yesterday, according to exchange data. The central bank will scale back efforts to control the exchange rate even as it predicts volatility in the baht will rise, Pongpen said. The baht slipped 0.2 percent to 31.73 per dollar, according to data compiled by Bloomberg. The currency touched 31.83 on Jan. 9, the weakest level since August 2010.
Taiwan Dollar Rallies
“For now, investors remain conservative about putting money into riskier assets,” said Shigehisa Shiroki, chief trader on the Asian and emerging-markets team at Mizuho Corporate Bank Ltd. in Tokyo. “There’s some optimism about the U.S. economy, but Europe’s problems haven’t been solved yet.”
Taiwan’s dollar rose to the strongest level in more than two months on speculation President Ma Ying-jeou will be re- elected this weekend. Tsai Ing-wen, chairwoman of the opposition Democratic Progressive Party will contest Ma, who is chairman of the Kuomintang party, on Jan. 14.
The island’s dollar gained 0.2 percent to NT$29.999, according to Taipei Forex Inc. It touched NT$29.904, the strongest level since Nov. 1. Overseas investors bought $318 million more local equities than they sold yesterday, the biggest net inflows since Dec. 1, according to exchange data.
China’s yuan was little changed at 6.3155 per dollar as U.S. Treasury Secretary Timothy F. Geithner prepares to hold talks with Premier Wen Jiabao in Beijing today. The Treasury Department said in a report two weeks ago that the yuan was “substantially undervalued” and the U.S. will “press for policy changes that yield greater exchange-rate flexibility.”
Elsewhere, the Philippine peso was little changed at 43.99 against the greenback, while Singapore’s dollar lost 0.2 percent to S$1.2914. India’s rupee climbed 0.1 percent to 51.6513.
To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net; 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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