Asian currencies declined for a third week, led by the Thai baht and Malaysia’s ringgit, amid concern a slowdown in China and US stimulus cuts will deepen a selloff in emerging markets.
The Bloomberg JPMorgan-Asia Dollar Index fell 0.1 percent this week as a report signaled China’s manufacturing contracted for the first time in six months.
The US Federal Reserve said on Wednesday it will pare its monthly bond purchases by US$10 billion to US$65 billion this month, following a similar reduction last month.
The baht had its worst week in almost a month after global funds pulled money from the nation’s assets amid concern an election today will trigger more violence.
“China has a big impact on the risk of emerging markets,” said Thomas Harr, Singapore-based head of local market strategy at Standard Chartered PLC. “That is weighing on Asia combined, with other concerns about tapering and political uncertainty in emerging markets.”
Thailand’s baht weakened 0.5 percent during the week to 33.02 per dollar in Bangkok, according to data compiled by Bloomberg.
The ringgit fell 0.5 percent this week through Friday to 3.3486, Indonesia’s rupiah dropped 0.3 percent to 12,210, while the Philippine peso was steady at 45.318. The Chinese yuan slipped 0.2 percent to 6.06.
Most financial markets in Asia were shut on Friday for the Chinese New Year holiday, except for Thailand and India. Taiwan and South Korea closed from Thursday.
A purchasing managers’ index (PMI) for China fell to 49.5 last month from 50.5 the previous month, HSBC Holdings PLC and Markit Economics reported on Thursday. The reading compared with the median 49.6 estimate in a Bloomberg News survey of economists. A number below 50 indicates contraction.
However, according to China’s National Bureau of Statistics and the China Federation of Logistics and Purchasing, the monthly PMI declined to 50.5 last month after recording 51.0 in December and 51.4 in November.
“We expect China hard-landing fears to be a source of occasional bouts of emerging-market stress this year,” Tim Condon, Singapore-based head of Asian research at ING Groep NV, wrote in a note on Thursday. “The Fed statement gave a new lease on life to the emerging-market stress.”
The baht touched the lowest level in almost three weeks on Friday as official data showed international investors sold US$499 million more Thai equities and bonds than they bought in the first four days of the week.
Thai Prime Minister Yingluck Shinawatra has declared a state of emergency and is deploying 10,000 police in Bangkok alone for the election as she seeks to avoid a repeat of violence that obstructed advance voting on Jan. 26.
The New Taiwan dollar closed up 0.25 percent at NT$30.376 against the US dollar on Wednesday, its second straight trading day of appreciation before the Lunar New Year holiday. The currency advanced 0.1 percent to NT$30.376 for the week. The NT dollar rose NT$0.075 versus the greenback on the Taipei Foreign Exchange Market on Wednesday, from NT$30.451 on Tuesday.
On the smaller Cosmos Foreign Exchange Market, the local currency ended at NT$30.365 against the US dollar on Wednesday, up NT$0.073 from Tuesday.
The local forex market is closed through Tuesday for the holiday.
Elsewhere in Asia, India’s rupee was little changed this week at 62.6575 per dollar, while South Korea’s won climbed 0.9 percent to 1,070.30 on Wednesday.