Asian currencies posted their biggest weekly decline in a month, led by India’s rupee, as weaker-than-forecast US economic data and Europe’s debt crisis damped demand for riskier assets.
More Americans filed claims for jobless benefits in the week ended April 14 and sales of previously owned homes unexpectedly dropped last month, reports showed this week. Spanish bond yields rose to a four-month high at an auction of 10-year securities on Thursday. The MSCI Asia-Pacific Index of stocks dropped 0.8 percent for the week.
“Lingering concerns about the European debt crisis and a slowing US recovery are making it a bit hard to add risk positions,” said Kozo Hasegawa, a Bangkok-based trader at Sumitomo Mitsui Banking Corp.
The rupee slid 1.5 percent this week to 52.0850 per US dollar on Friday in Mumbai, the biggest drop since the five days ended March 23, according to data compiled by Bloomberg. Indonesia’s rupiah fell 0.5 percent to 9,183, and Malaysia’s ringgit slid 0.4 percent to 3.0643.
The New Taiwan dollar bucked the trend by advancing for a second week as the government vowed to contain inflation. The overnight interbank lending rate reached a three-year high.
“The central bank is quite determined to control inflation,” said Tarsicio Tong (湯健揚), a currency trader at Union Bank of Taiwan (聯邦銀行) in Taipei. “It’s allowing rises in the overnight rate to drain excess cash from the system.”
The NT dollar advanced 0.02 percent this week, according to Taipei Forex Inc, while the overnight money-market rose 0.6 basis points to 0.491 percent this week, according to a weighted average compiled by the Taiwan Interbank Money Center. It reached 0.493 percent on Friday, the highest level since December 2008.
China’s yuan declined 0.09 percent this week to 6.3085 per US dollar after the nation widened the currency’s trading band to 1 percent from 0.5 percent from Monday. The band, which is centered on a rate set daily by the central bank, was last broadened in May 2007 from 0.3 percent. The central bank weakened the yuan’s daily reference rate against the greenback on four out of five days this week.
The won posted a second weekly loss, falling 0.4 percent to 1,139.55 won, as a defiant North said it would continue its space program.
“The won is facing downward pressure with North Korea-related risks and concerns about the global economic recovery,” said Han Sung-min, a Seoul-based currency trader at Busan Bank.
Elsewhere, Thailand’s baht weakened 0.6 percent from April 12 to 30.90. Thailand’s onshore financial markets were closed on April 13 and Monday for public holidays. The Philippine peso climbed 0.1 percent to 42.607, while Vietnam’s dong gained 0.4 percent to 20,838.