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Asian Currencies Weaken on Concern Europe to Slow Global Growth

Asian currencies weakened, led by the Philippine peso, as concern Europe’s debt crisis will worsen damped the export outlook and curbed demand for riskier assets.

Asian stocks fell for a fourth day after Greek Prime Minister Antonis Samaras faced opposition from coalition partners on austerity measures needed to win 31 billion euros ($40 billion) of international aid. Global funds sold $190 million more Taiwanese, South Korean and Thai stocks than they bought yesterday, exchange data show.

“There was a souring of risk sentiment overnight,” said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd. “There are still lingering concerns about Europe.”

The peso declined 0.1 percent to 41.363 per dollar in Manila, according to data compiled by Bloomberg. Malaysia’s ringgit fell 0.1 percent to 3.0598, touching a one-week low, and Thailand’s baht slipped 0.1 percent to 30.77. The MSCI Asia Pacific Index of shares dropped 0.5 percent, taking its decline since Oct. 18 to 1.5 percent.

The baht fell for a fifth day, its longest streak since August, even as exports halted a three-month contraction. The government said today shipments rose 0.2 percent last month from a year earlier, versus a median forecast for a 2.7 percent drop in a Bloomberg survey.

“Investors are worried about the global economic slowdown,” said Tsutomu Soma, manager of the investment trust and fixed-income business at Rakuten Securities Inc. in Tokyo. “This is feeding into the deterioration in the export outlook for Asia and weighing on regional currencies.”

Philippine Rates

Fourteen of 21 analysts in a separate Bloomberg survey predict the Philippine central bank will lower its benchmark rate to 3.50 percent tomorrow from 3.75 percent. Seven forecast no change. Bangko Sentral ng Pilipinas has trimmed its overnight rate three times this year as the local currency rallied 6 percent. Overseas sales dropped 9 percent in August from a year earlier, while inflation slowed to 3.6 percent in September, official data show.

“Weakening exports, decelerating inflation and the rapid appreciation of the peso should compel the central bank to cut,” said Emilio Neri, an economist at Bank of the Philippine Islands in Manila.

HSBC Holdings Plc and Markit Economics’ preliminary reading for a purchasing managers’ index in China released today was 49.1 in October, compared with a final result of 47.9 last month. A reading below 50 signals contraction. The yuan was unchanged at 6.2480 per dollar, after gaining 0.11 percent yesterday.

Elsewhere, South Korea’s won weakened 0.1 percent to 1,103.74 per dollar, while Taiwan’s dollar fell 0.1 percent to NT$29.342 after rising as much as 0.2 percent. Indonesia’s rupiah advanced 0.2 percent to 9,585 and Vietnam’s dong was little changed at 20,848. Financial markets in India were closed for a holiday.

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