Asia Currencies Fall on Global Growth Concern, Europe Debt Risk

Asian currencies dropped, led by India’s rupee and Thailand’s baht, on concern a slowing Chinese economy and Europe’s debt crisis will curb the region’s exports.   The Bloomberg-JPMorgan Asia Dollar Index touched its lowest level in more than a week after a survey of companies indicated China’s manufacturing shrank for a sixth month in April. Reports this week may show South Korea’s economy expanded 3 percent in the first quarter, slowing from 3.3 percent growth, and Thailand’s exports rose 0.1 percent in March from a year earlier, down from 0.9 percent, according to median estimates of economists in Bloomberg surveys.   “Currencies will stay bearish, especially with the recent data highlighting concerns,” said Vikas Babu, a currency trader at state-run Andhra Bank (ANDB) in Mumbai. “Europe continues to be the source of pain for Asian and other emerging markets.”   The rupee slumped 0.8 percent to 52.50 per dollar as of 1:48 p.m. in Mumbai, after touching 52.57, the weakest level since Jan. 9, according to data compiled by Bloomberg. The baht dropped 0.2 percent to 30.97 and the Philippine peso declined 0.2 percent to 42.673. The Asia Dollar Index, which tracks the region’s 10 most active currencies excluding the yen, slid 0.1 percent to 116.45.   HSBC Holdings Plc and Markit Economics reported a preliminary reading of 49.1 for their China purchasing managers’ index in April, compared with a final 48.3 in March. A number less than 50 signals contraction. European Central Bank officials led by President Mario Draghi resisted calls from the International Monetary Fund and U.S. Treasury to do more to stem the debt crisis roiling the euro-area economy.

Stock Sales

Global funds sold $1.2 billion more South Korean, Taiwanese and Indonesian stocks than they bought last week, exchange data show. The MSCI Asia-Pacific Index of shares fell for a third straight day.   The baht touched the weakest level since April 11 before trade data this week. China was the Southeast Asian nation’s biggest export market, buying 11.5 percent of the total in the first two months of this year, while the European Union purchased 8.3 percent, according to official data.   “The weakness in the Thai baht is due to the situation in Europe that’s causing some small capital outflows,” said Kampon Adireksombat, an economist in Bangkok at Tisco Securities Co. “Apart from a base effect, exports are also affected by the slowdown in China and Europe.”   Elsewhere, the Indonesian rupiah fell 0.1 percent to 9,188 per dollar, while the Chinese yuan was unchanged at 6.3085. South Korea’s won and Taiwan’s dollar were little changed at 1,139.50 and NT$29.52, respectively.

To contact the reporters on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net; Jeanette Rodrigues in Mumbai at jrodrigues26@bloomberg.net

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

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