June 25 (Bloomberg) -- Asian currencies fell to a two-week low, led by the Philippine peso and South Korea’s won, on concern Europe’s worsening debt crisis will slow global growth.
The peso and the won both dropped for a third day, their longest losing streaks this month, as regional stocks declined. France and Italy are urging Germany to take decisive action ahead of a two-day summit in Belgium from June 28 after Spain’s 10-year bond yields rose above 7 percent last week. India’s rupee snapped a five-day slump as policy makers prepared measures to halt a slide in the currency, which sank to a record low last week.
“Hopes are high but optimistic expectations on Europe are at risk of being disappointed,” said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd. “The market is also anxious for a greater policy response as the soft economic patch is at risk of worsening.”
The won weakened 0.4 percent to close at 1,161.63 per dollar in Seoul, according to data compiled by Bloomberg. The peso finished 0.5 percent lower at 42.645, while Indonesia’s rupiah was down 0.4 percent at 9,475 as of 3:33 p.m. in Jakarta. Thailand’s baht dropped 0.3 percent to 31.87. The rupee advanced 1 percent to 56.59.
The Bloomberg-JPMorgan Asia Dollar Index fell 0.1 percent and touched its lowest level since June 8. The gauge’s 60-day historical volatility was steady at 2.91 percent. The MSCI Asia-Pacific Index of stocks fell 0.6 percent, a third day of losses.
The baht fell to this month’s low of 31.96 per dollar after overseas investors pulled $140 million out of Thai stocks last week. The currency remained lower after a government report today showed exports rose 7.68 percent in May from a year earlier, after declining 3.67 percent in April. Economists had forecast a 0.5 percent gain in a Bloomberg survey.
“Foreigners have been net sellers in Thailand for quite some time and that put downward pressure on the baht,” said Disawat Tiaowvanich, a foreign-exchange trader at Bangkok Bank Pcl. “Sentiment remains weak until the EU summit.”
India plans to announce measures today to support the rupee after the currency slumped to a record-low 57.3275 versus the dollar last week, Finance Minister Pranab Mukherjee said June 23. The rupee is Asia’s worst-performing currency of the past year, having tumbled 21 percent.
The yuan was little changed at 6.3648 per dollar in Shanghai. The currency earlier fell as much as 0.3 percent to the weakest level in seven months after the People’s Bank of China set its reference rate 0.30 percent lower at 6.3230 per dollar.
“We had seen big moves in the U.S. dollar crosses versus the euro, yen and Aussie dollar,” said Robert Minikin, a senior strategist at Standard Chartered Bank in Hong Kong. The weaker yuan also reflects the unwinding of gains following strong fixings before the Group of 20 meeting last week, he said.
Elsewhere, Malaysia’s ringgit was little changed at 3.1940 per dollar versus 3.1932 on June 22. Taiwan’s dollar fell 0.1 percent to NT$29.995, while the Vietnamese dong climbed 1 percent to 20,938.
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