Asian Currencies Slide on European Election Results, U.S. Jobs

Asian currencies fell, led by South Korea’s won and Malaysia’s ringgit, after the results of elections over the weekend in Europe stoked concern the region’s debt crisis may worsen.

The won dropped by the most in a month as the MSCI Asia- Pacific Index (MXAP) of stocks lost more than 2 percent, sinking to the lowest level since January. Greek voters flocked to anti-bailout candidates, putting at risk austerity efforts needed to ensure the flow of financial aid. In France, Socialist Francois Hollande was elected president. He supports policies German Chancellor Angela Merkel opposes, including higher taxes, increased spending and delayed deficit-reduction efforts.

“The French and Greek results were not encouraging,” said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd. “With the Greek result, it’s doubtful whether they can stick to the reform package. We’ve seen a fair bit of risk aversion coming in.”

The won slid 0.6 percent to 1,138.50 per dollar in Seoul, according to data compiled by Bloomberg. The ringgit weakened 0.4 percent to 3.0555, the Singapore dollar dropped 0.5 percent to $1.2484 and the Philippine peso lost 0.1 percent to 42.35.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-used currencies excluding the yen, fell for a fifth day to a two-week low. Its 60-day historical volatility dropped to 2.69 percent from 2.72 percent on May 4.

U.S. payrolls climbed by 115,000 in April, the smallest gain in six months and less than the median economist forecast of economists surveyed by Bloomberg for an advance of 160,000, official data showed on May 4. Slower hiring may signal waning demand from the U.S. for Asian exports as China’s economy cools.

Rocky Start

“Asian currencies will start off rocky this week due to weak U.S. payrolls combined with uncertainty in the Greek elections,” said Sean Yokota, a Singapore-based currency strategist at UBS AG.

Taiwan’s dollar slipped 0.4 percent to NT$29.382 as a government report today showed exports fell 6.4 percent in April from a year earlier, following a 3.2 percent decline in March. That was bigger than a 3.1 percent drop forecast in a Bloomberg survey of 14 analysts.

Indonesia’s economic growth exceeded 6 percent for a sixth quarter as investment gained, countering a slowdown in export growth. Growth increased 6.3 percent in the first quarter from a year ago, compared with 6.49 percent in the final three months of 2011. The rupiah gained 0.3 percent to 9,245 per dollar.

Yuan Fixing

The People’s Bank of China set the yuan’s reference rate 0.22 percent weaker at 6.2858 per dollar, the biggest drop since March 12, after the close last week of the annual Strategic and Economic Dialogue with U.S. officials. The yuan fell 0.10 percent to 6.3100 per dollar, according to China Foreign Trade System.

“The dollar is stronger, Asian currencies are weaker and the U.S.-China political event is over and you could see a surprise” weaker yuan fixing today, Yokota said. “That could add another push for Asian currencies to be weaker versus the dollar in addition to issues from U.S. payrolls and Greece.”

A government report this week may show Chinese exports rose 8.5 percent in April, slowing after March’s 8.9 percent gain, according to the median forecast in a Bloomberg News survey. Consumer prices rose 3.4 percent versus 3.6 percent in March, a separate survey showed before official data due May 11.

Rupee Intervention

India’s rupee rose, extending its rebound from an almost five-month low, on speculation the central bank sought to arrest a slide in Asia’s worst performing currency this quarter.

“Looking at the price action, it does look like the Reserve Bank of India is in the market,” said Paresh Nayar, head of money-market and currency trading in Mumbai at FirstRand Ltd. “The RBI measures were rupee-positive, but the overnight events in Europe were overwhelming. We will need stability in the global environment to see further rupee strengthening.”

The rupee strengthened 0.5 percent to 53.1975 per dollar, according to data compiled by Bloomberg. It fell as much as 0.5 percent earlier.

Elsewhere in Asia, Vietnam’s dong was little changed at 20,850 per dollar. Thailand’s financial markets are closed for a public holiday.

To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net; Kyoungwha Kim in Singapore at kkim19@bloomberg.net

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

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