The New Taiwan dollar posted its biggest weekly decline in more than a year as concern that Europe’s sovereign-debt crisis will worsen reduced demand for higher-yielding assets.
International investors sold US$409 million more of the nation’s stocks than they bought this week, according to exchange data. Export orders, an indication of shipments in the next one to three months, increased 7.6 percent last month from a year earlier, slower than 11.1 percent in July, according to the median forecast of economists in a Bloomberg survey before official data due on Tuesday.
“With the European debt issues, investors remain risk averse, damping demand for emerging-market assets,” said Minori Uchida, a senior analyst in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd. “The economy is cooling globally and that may hurt Asia’s exports.”
The NT dollar dropped 1.2 percent this week, the most since May last year, to NT$29.584 against the US dollar, according to Taipei Forex Inc. The currency, which advanced 0.2 percent on Friday, touched NT$29.70 on Wednesday, the weakest level since March 1.
The currency strengthened on Friday, snapping nine days of losses, after the European Central Bank said it would coordinate with international policy makers to lend US dollars to euro-area banks to ensure they have enough cash.
Asian currencies fell this week, with Indonesia’s rupiah sliding the most since June 2009.
The Bloomberg-JPMorgan Asia Dollar Index touched a five-month low on Thursday as global funds pulled more than US$2 billion from equities in South Korea, Taiwan and Indonesia since the end of last week. The Asian Development Bank this week cut its growth forecast for next year for the region excluding Japan to 7.5 percent, from an April estimate of 7.8 percent.
The Asia Dollar Index slumped 0.7 percent this week to 117.56 yesterday, according to data compiled by Bloomberg. The rupiah declined 2.4 percent to 8,800 per US dollar and South Korea’s won tumbled 3.1 percent to 1,112.10 per US dollar, the region’s worst performance. India’s rupee slid 1.5 percent to 47.2650 and Malaysia’s ringgit dropped 2.3 percent to 3.08 per US dollar. Losses for the NT dollar, won, rupee and ringgit were the worst since the middle of last year.
“Asian currencies are under downward pressure as the European debt crisis prevails in the market and deters risk-taking,” said Kozo Hasegawa, a currency trader at Sumitomo Mitsui Banking Corp in Bangkok. “There is growing concern about the outlook for exports from Asia given conditions in the US and Europe.”
India’s industrial production expanded in July at the slowest pace since October 2009 and Philippine exports fell for a third straight month, reports showed this week. Taiwan’s export orders, an indication of shipments in the next one to three months, increased 7.6 percent in August from a year earlier, compared with growth of 11.1 percent in July, according to the median forecast of economists in a Bloomberg survey before official data due on Tuesday.
South Korean Finance Minister Bahk Jae Wan said at a meeting on Friday that global economic risks are growing. His ministry phoned media outlets including Bloomberg News on Friday to signal possible intervention in the currency market, the first time it’s done so since April 2010.
Bank Indonesia intervened in the rupiah and bond markets, Deputy Governor Hartadi Sarwono said on Thursday, when the currency declined as much as 2.6 percent and reached 8,939 per US dollar, the weakest level since February.
Elsewhere, Thailand’s baht fell 1 percent this week to 30.37 per US dollar and the Philippine peso dropped 1.9 percent to 43.26 per US dollar. China’s yuan strengthened 0.08 percent to 6.3834 per US dollar.
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