Most Asian Emerging Currencies Decline as China's Yuan Weakensby
Most Asian emerging-market currencies weakened on speculation China will allow its currency to keep declining after it dropped last week beyond the level it was forecast to reach by year-end.
The offshore yuan headed toward a record low Monday after the central bank fixed the currency weaker, signaling tolerance for further declines amid a strengthening dollar and a drop in exports. The South Korean won fell for a third day, while the Taiwan dollar and Malaysian ringgit also depreciated.
“Asian currencies were trading on the cautious side last week and today there is a lot of interest in the yuan fixing,” said Sim Moh Siong, a foreigh-exchange strategist at Bank of Singapore Ltd., based in the city state. “The yuan’s weakness was more of a reflection of the dollar strength, and the spillover concerns seem a bit overdone.”
The won dropped 0.1 percent to 1,135.82 per dollar as of 9:48 a.m. in Hong Kong after sliding 1 percent in the previous two days. The Taiwan dollar slid 0.3 percent to 31.70 per greenback and the ringgit slipped 0.1 percent to 4.1890.
The yuan retreated 0.1 percent to 6.7758 a dollar per dollar, near a record low of 6.7850 reached September 2010. The yuan is estimated to end this year at 6.75, according to the median of forecasts in a Bloomberg survey.