Asian currencies fell this week, led India’s rupee and South Korea’s won, as US data added to signs the global economic recovery is losing steam and Europe’s worsening debt crisis bolstered demand for dollars.Asia Pacific stocks slumped for a fourth week as investors favored safer bets than emerging-market assets. US reports published showed consumer confidence is the weakest since March 2009, existing home sales dropped in July and jobless claims rose more than economists forecast. Taiwan released second-quarter gross domestic product data late Thursday, joining China, South Korea, Hong Kong, Malaysia and Singapore in reporting the slowest expansions since 2009.
“The risk of recession has increased and we do expect some further monetary stimulus from the US,” said Roy Teo, a foreign-exchange strategist at ABN Amro Private Bank in Singapore.
“It’s hard to predict the turning point as to when the European policies will calm the market and until they do so, the dollar will be supported and Asian currencies could come under more pressure.”The won weakened 0.7 per cent to 1,097.55 at the 3 p.m close in Seoul from a week ago, according to data compiled by Bloomberg. The rupee slid 0.9 per cent to 45.7475 per dollar before local markets were closed for a holiday today. China’s yuan fell 0.1 per cent to 6.3930. The Bloomberg-JPMorgan Asia Dollar Index, which tracks Asia’s 10 most-used currencies excluding the yen, lost 0.2 per cent.The MSCI Asia Pacific Index fell 2.3 per cent this week, headed for its lowest close since September 2010. Morgan Stanley and Deutsche Bank AG lowered growth estimates for China, Asia’s biggest economy, this week and Citigroup Inc. cut its projections for US expansion.
Chinese Commerce Minister Chen Deming said Aug.17 that trade growth will slow in the second half as austerity measures cool demand in Western nations.The won led declines in regional currencies, sliding 0.8 per cent, as Financial Supervisory Service Governor Kwon Hyouk Se asked insurers to refrain from paying dividends and boost capital in preparation for a potential crisis. The Singapore dollar slipped 0.1 per cent to S$1.2128 this week.
From / Gulf Today