Asian currencies fell this week, led by 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 US dollars.
Taiwan released second-quarter GDP data late on Thursday, joining China, South Korea, Hong Kong, Malaysia and Singapore in reporting the slowest expansion 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 US dollar will be supported and Asian currencies could come under more pressure.”
The New Taiwan dollar weakened to a four-month low after the government reported the slowest economic expansion since 2009 and cut its growth forecast for this year.
“Bad global and Taiwan economic outlooks are good for bond performances,” said James Wang, a fixed-income trader at Yuanta Securities Co (元大證券) in Taipei. “Since economic growth is slowing, there might not be a need for the central bank to tighten any more. That supports bonds as well.”
The New Taiwan dollar declined 0.3 percent to NT$29.076 against its US counterpart at the 4pm local close on Friday, according to Taipei Forex Inc. It touched NT$29.135 earlier, the weakest level since April 19. The currency slid 0.2 percent this week.
The won weakened 0.7 percent to 1,097.55 at the 3pm close in Seoul from a week ago, according to data compiled by Bloomberg.
The rupee slid 0.9 percent to 45.7475 per US dollar before local markets were closed for a holiday on Friday.
China’s yuan fell 0.1 percent to 6.3930.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks Asia’s 10 most-used currencies excluding the yen, lost 0.2 percent.
The Singapore dollar slipped 0.1 percent to S$1.2128 this week. Thailand’s baht gained 0.1 percent to 29.86 per US dollar, snapping a run of three weekly declines.
Malaysia’s ringgit gained 0.8 percent this week to 2.9785. The Philippine peso was little changed at 42.643 while Indonesia’s peso was also steady at 8,563.