BLBG: Asia Currencies Fall, Led by Won, Rupee, on Recovery Concerns
By Lilian Karunungan and Bob Chen
Aug. 11 (Bloomberg) -- Asian currencies fell, led by South Korea’s won and the Indian rupee, as concern a global economic recovery is losing momentum deterred investment in emerging- market assets.
The won dropped the most in four weeks and the rupee slid to its weakest level this month after China, the world’s biggest developing economy, reported slides in exports and new lending for July. Bank of Japan Governor Masaaki today said any pickup in Asia’s largest economy is likely to be weak and the Bank of Korea left its benchmark interest rate unchanged at a record-low 2 percent for a sixth consecutive month.
“There was disappointment on the China data,” said Daniel Hui, a foreign-exchange strategist at HSBC Holdings Plc in Hong Kong. “The riskier currencies have come off some.”
The won fell 0.9 percent to close at 1,239.20 per dollar in Seoul, according to data compiled by Bloomberg. It earlier touched 1,243.95, the weakest level since July 30. The rupee slid as low as 48.045 before trading down 0.3 percent at 47.9375 as of 2:22 p.m. in Mumbai.
China’s exports dropped 23 percent from a year earlier last month, a ninth straight decline, the government reported today. Central bank data showed new lending totaled 356 billion yuan ($52 billion), less than a quarter of June’s 1.53 trillion yuan total and short of the 500 billion yuan forecast by economists in a Bloomberg News survey.
“The loan growth was quite a bit less than what the market was expecting,” said Craig Chan, a Singapore-based strategist at Nomura Holdings Inc., Japan’s largest brokerage. “The other softer Chinese data out this morning may also add to any sell- off in the region.”
‘Change of Tune’
The yen rose for a second day after China’s economic data spurred demand for Japan’s currency, a perceived safe haven. It climbed to 96.79 per dollar from 97.15. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-used currencies excluding the yen, slipped for a second day, after climbing in each of the last four weeks.
“There appears to be a slight change of tune in favor of caution,” said Suresh Kumar Ramanathan, a currency strategist at CIMB Investment Bank Bhd. in Kuala Lumpur. “The region is still reliant on exports and the authorities may want to keep their currencies on the neutral-to-weaker side.”
‘Shaky’ Prospects
India’s rupee fell after foreign funds sold more Indian equities than they bought for the third day in a row on Aug. 7, the longest stretch of net sales in six weeks. The rupee also declined on concern local refiners will boost dollar purchases after crude oil prices rose, according to Sanjay Arya, treasurer at state-owned Bank of Maharashtra.
“Growth prospects in the region appear to be shaky, which is why investors are refraining from long-term commitments,” Mumbai-based Arya said. “The preference is for stronger investments and the rupee at present is not part of that.”
Malaysia’s ringgit dropped 0.1 percent to 3.5092 per dollar, having last week reached a two-month high of 3.4840. Nor Mohamed Yakcop, head of the country’s Economic Planning Unit, yesterday predicted economic growth will be “anemic” as a global recession abates.
The baht was little changed at 34.03 after overseas investors yesterday sold 724 million baht ($21.3 million) more of Thai equities than they bought, the first day of net sales this month.
Intervention Risk
Taiwan’s dollar dropped for a fourth day as foreigners trimmed their holdings of the nation’s stocks today by NT$3.2 billion ($97 million). The currency has retreated since reaching a two-month high last week on concern the Central Bank of the Republic of China (Taiwan) will intervene to prevent appreciation that may prolong an export slump.
“We’ve been seeing profit-taking in the Taiwan dollar in the past few days,” said Gerrard Katz, head of foreign-exchange trading at Standard Chartered Plc in Hong Kong. “Possible central bank intervention could also move the Taiwan dollar weaker.”
The Taiwan dollar slipped 0.1 percent to NT$32.855 versus the greenback, according to Taipei Forex Inc. Central banks can try to influence exchange rates by buying or selling foreign currency.
Elsewhere, Indonesia’s rupiah dropped 0.1 percent to 9,943 against the U.S. currency in Jakarta. The Philippine peso was little changed at 47.710 and the Singapore dollar fell 0.2 percent to S$1.4442, dropping for a fifth straight day.
To contact the reporters on this story: Lilian Karunungan in Singapore at at lkarunungan@bloomberg.net;
