Asian currencies had their worst weekly loss in six months as signs of a deeper economic slowdown in China and the US Federal Reserve’s support for tapering asset purchases weighed on emerging markets.
South Korea’s won led the declines as a gauge of manufacturing in China, the nation’s biggest export market, fell to a seven-month low. Thailand’s baht had its steepest five-day drop this year as anti-government protests turned deadly, while violence in Ukraine also dampened sentiment.
Fed policymakers backed further stimulus cuts at their review last month, the minutes of their meeting showed, a program that drove capital into developing countries.
The Bloomberg JPMorgan-Asia Dollar Index, which tracks the region’s 10 most-active currencies, declined 0.6 percent last week, the biggest decline since Aug. 23, to 115.33 in Singapore. The won dropped 0.8 percent, the most in a month, to 1,072.09 per US dollar in Seoul, data compiled by Bloomberg shows.
The New Taiwan dollar fell 0.2 percent to NT$30.395 against the US dollar this week. The greenback opened lower on Friday, as traders pocketed gains generated from a day earlier and foreign institutional investors bought a net NT$10.36 billion (US$340.85 million) of Taiwanese shares, dealers said.
However, the weakness of regional currencies, especially the won, central bank intervention and concern over China’s weak manufacturing report eased the pressure on the greenback, they said.
A preliminary purchasing managers index of factory output in China fell to 48.3 this month from 49.5 last month, HSBC Holdings PLC and Markit Economics reported on Thursday, below the median estimate in a Bloomberg survey of 49.5. A reading lower than 50 indicates contraction.
The yuan dropped 1.2 percent from Feb. 14 to 6.1082 per US dollar in the offshore market in Hong Kong, according to data compiled by Bloomberg. The onshore rate declined 0.4 percent in Shanghai to 6.0914, the biggest five-day loss since June 2012.
In Thailand, a violent clash between police and protesters on Tuesday left five people dead and injured at least 69. The demonstrators are ramping up efforts to oust tHAI Prime Minister Yingluck Shinawatra on claims her government is corrupt.
The baht dropped 0.7 percent this week to 32.555 per US dollar in Bangkok, taking its loss for the past three months to 2.4 percent, the third-worst performance in Asia after the Malaysian ringgit and the NT dollar.
Elsewhere in the region, India’s rupee weakened 0.3 percent during the five days to 62.13 versus the greenback in Mumbai. The ringgit climbed 0.3 percent for a third weekly advance to 3.2954 and Indonesia’s rupiah strengthened 0.7 percent to 11,743. The Philippine peso gained 0.4 percent to 44.555, while the Vietnamese dong was steady at 21,105.
The US dollar also rose the most against the yen this year as the Bank of Japan maintained its monetary stimulus while the Fed backed stimulus tapering.
The yen fell against most of its 16 major peers after the Bank of Japan doubled a funding tool to ￥7 trillion (US$68 billion) and said individual banks may borrow twice as much low-interest money as previously allowed under a second facility.
The US dollar rose 0.7 percent this week to ￥102.66 in New York, the biggest gain since the week ended Dec. 27. It dropped 0.4 percent to US$1.3746 per euro, a third weekly decline. The yen fell 1.1 percent to ￥140.90 per euro.