The Philippine peso led a weekly decline in Asian currencies as tensions in Ukraine and the Middle East and improving US data spurred demand for the greenback.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, fell 0.1 percent in the past five days for a second weekly decline. The peso dropped 0.8 percent from Aug. 1 to 44.13 per US dollar, India’s rupee declined 0.3 percent to 61.3675, while China’s yuan advanced 0.4 percent to 6.1564. The New Taiwan dollar was steady at NT$30.066.
Russian President Vladimir Putin this week countered US and European sanctions over a pro-Russian insurgency in Ukraine with a ban on the import of a range of food products, while US President Barack Obama authorized air strikes in Iraq late on Thursday.
“Asian currencies weakened this week due to an overall sense of risk aversion in global markets due to escalating tensions in Ukraine and as solid US data revived fears over an early rate hike” by the US Federal Reserve, said Dariusz Kowalczyk, a Credit Agricole CIB strategist in Hong Kong.
The peso fell 0.1 percent yesterday and touched a three- month low of 44.278 per US dollar after the World Bank on Friday cut its growth forecasts for the Philippines for this year and next to 6.4 percent and 6.7 percent respectively from previous estimates of 6.6 percent and 6.9 percent, citing weak spending and tighter monetary policy.
Global funds sold US$59 million more Philippine stocks than they bought this week and offloaded US$436 million of Taiwanese equities, according to exchange data.
The US dollar rose against the NT dollar on Friday, gaining NT$0.005 to close at NT$30.066 as the greenback recouped earlier losses to end in positive territory, dealers said.
Bolstered by central bank buying, the US dollar closed above the NT$30 mark for the 19th consecutive session in a bid to make the local currency cheaper and give an edge to Taiwanese exporters in the global market, dealers said.
The yuan in Shanghai strengthened 0.08 percent on Friday as official data showed China’s exports grew for a fourth straight month and the trade surplus widened to a record.
Elsewhere in the region, South Korea’s won gained 0.1 percent this week to 1,036.45 in Seoul, Malaysia’s ringgit strengthened 0.1 percent to 3.2078. Vietnam’s dong was steady at 21,215, while Indonesia’s rupiah fell 1.8 percent to 11,788 from July 25. Financial markets in Jakarta were closed last week for the Eid holiday.
Meanwhile, the yen rallied the most in four weeks amid concern geopolitical crises from the Middle East to Ukraine may escalate demand for haven assets.
The pound fell for a fifth week as UK exports dropped and the Bank of England maintained record-low interest rates. Canada’s dollar declined for a third week on slow jobs growth.
The yen advanced 0.6 percent this week to ￥102.04 per US dollar in New York, the biggest weekly gain since July 11, and reached ￥101.51, the strongest since July 24. It rallied 0.7 percent to ￥136.83 versus the euro after gaining to ￥135.73, the strongest level since Nov. 21.
The shared currency fell 0.1 percent to US$1.3410 for a fourth weekly decline, the longest since a five-week skid ended March 8.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 developed-market peers, rose 0.1 percent to 1,021.37, its fourth-straight weekly gain and the longest stretch since March.
The yen and Norway’s krone gained the most among the dollar’s 31 major peers on the week, adding 0.6 percent, followed by the Chinese yuan’s 0.4 percent advance.
In the UK, the June trade gap widened to ￡9.4 billion (US$15.8 billion) from ￡9.2 billion, with the second-quarter deficit reaching ￡27.4 billion, the most since the period through September last year. Sterling fell to its lowest level in eight weeks after Bank of England officials maintained their key interest rate at 0.5 percent. The central bank will update economic forecasts next week.
The pound slid 0.3 percent on the week to US$1.6773, touching an almost two-month low of US$1.6767.
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