Asian Currencies Fall on Concern Global Slowdown to Hurt Exports

The Philippine peso led declines in Asian currencies amid concern a global economic slowdown will worsen the outlook for exports that drive the region’s growth.

The Bloomberg-JPMorgan Asia Dollar Index (ADXY) fell to its lowest level in more than a week after data released yesterday showed the euro-area economy shrank in the second quarter. India, South Korea, Indonesia and Taiwan all released trade figures since the start of August showing slides in their overseas sales. Slower growth in China, Asia’s biggest economy, may hurt overseas shipments from the Philippines, central bank Governor Amando Tetangco said yesterday.

“Weakening global growth is finally taking its toll on Asian exports,” said Wee-Khoon Chong, a fixed-income strategist at Societe Generale SA in Hong Kong. “This in turn is likely to drag Asian growth lower, which would not bode well for regional currencies.”

The Asia Dollar Index, which tracks the region’s 10-most active currencies excluding the yen, declined 0.1 percent to 115.23 as of 4:38 p.m. in Hong Kong. It earlier touched 115.18, the lowest since Aug. 3. The peso slumped 0.8 percent to 42.27 per dollar, India’s rupee dropped 0.6 percent to 55.66 and Thailand’s baht depreciated 0.4 percent to 31.54, according to data compiled by Bloomberg.

Merchandise shipments from India declined 14.8 percent to $22.4 billion last month, Director General of Foreign Trade Anup Pujari said yesterday. Struggling exports and a moderation in investment have contributed to a slowdown in the nation’s economy. Gross domestic product rose 5.3 percent in the three months through March from a year earlier, the least since 2003.

Malaysia Data

The ringgit fell before data forecast to show Southeast Asia’s third-largest economy grew at the slowest pace in a year. GDP increased 4.6 percent in the second quarter from a year earlier, compared with 4.7 percent in the previous three months, according to the median estimate of economists in a Bloomberg survey before official data due today. The currency fell 0.4 percent to 3.1332 versus the greenback.

“People are reluctant to take heavy positions ahead of the GDP data, which could signal downside risks to growth,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. (MAY) in Singapore. “The Malaysian currency will likely trade in a tight range this week against the dollar.”

China’s yuan declined as the central bank set the currency’s daily fixing at the lowest level since November. A report yesterday suggested capital flowed out of the country last month after economic growth slowed to three-year-low. The currency slid 0.06 percent to 6.3625 against the dollar in Shanghai.

Yuan Rate

The People’s Bank of China lowered the yuan’s reference rate by 0.06 percent to 6.3482 per dollar today, the weakest level since Nov. 30. Yuan positions at Chinese lenders accumulated from foreign-exchange purchases stood at 25.658 trillion yuan ($4 trillion) at the end of July, down from 25.661 trillion yuan in June, PBOC data showed yesterday.

“The yuan will continue to suffer from the cautious atmosphere,” said Patrick Cheng, a Hong Kong-based foreign-exchange analyst at Haitong International Securities Co. “Investors are watching what China will do to revive growth. It’ll take a while for those funds that have left to return.”

Elsewhere, Vietnam’s dong dropped 0.7 percent to 21,003 against the dollar, while Indonesia’s rupiah declined 0.3 percent to 9,510. Taiwan’s dollar slid 0.1 percent to NT$30.002. Financial markets were closed today in South Korea and India for public holidays.

To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net

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

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