Asian currencies dropped for a sixth week to post their longest declining streak since 2008, as economic data boosted demand for the US dollar and supported the case for higher US interest rates.
Malaysia’s ringgit led losses, falling to a five-year low on Friday, as plummeting crude prices threatened the oil exporter’s growth outlook. The ringgit weakened 2.5 percent from Nov. 28 — the most since June last year — to close at 3.4713 per US dollar in Kuala Lumpur, data compiled by Bloomberg show.
The Bloomberg- JPMorgan Asia Dollar Index, which tracks the most active currencies excluding the yen, lost 0.2 percent, taking its drop since the end of October to 1.4 percent.
“There’s a firmer [US] dollar in general and that’s having a broad-based negative impact on Asian currencies,” said Mitul Kotecha, head of Asia-Pacific currency strategy at Barclays PLC in Singapore. “Being a net exporter of oil, Malaysia suffers more than others.”
The Bloomberg Dollar Spot Index, which tracks the US currency against 10 peers, rose 0.7 percent this week and is up 11 percent since the end of June. Twenty-one of 24 emerging market currencies followed by Bloomberg have fallen against the greenback this week.
UBS AG cut Malaysia’s growth forecast for next year from 5 to 4.5 percent, citing the negative impact of lower oil prices, economists wrote in a report on Wednesday.
In Taipei, the New Taiwan (NT) dollar declined 0.5 percent to NT$31.192 over the week.
The greenback fell against the NT dollar on Friday, shedding NT$0.005 to close at NT$31.192 as the strength of the euro encouraged traders to buy into the local currency, dealers said.
The greenback opened at the day’s high of NT$31.197, but soon fell into negative territory against the NT dollar in the wake of a higher euro after the European Central Bank refrained from further quantitative easing a day earlier, they added. Traders seized the euro’s upturn as an excuse to lock in gains posted by the US dollar in the foreign exchange market in recent sessions, the dealers said.
As it has done almost every session recently, the central bank stepped in to prop up the US unit, helping it recoup most of its losses in a bid to slow the pace of the NT dollar, they said.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$1.52 billion (US$48.73 million) worth of local shares on the main board, which boosted demand for the greenabck.
In Jakarta, the rupiah touched a six-year low on Thursday, while South Korea’s won fell to the lowest level in 15 months earlier in the week as the US Federal Reserve’s Beige Book on Wednesday showed “widespread” job gains across the world’s largest economy.
The rupiah fell 0.8 percent to 12,299, while the won depreciated 0.5 percent to 1,113.96.
The rupiah faces downward pressure because the local units of international companies will need more US dollars for income repatriation in the coming weeks, PT BNI Securities economist Heru Irvansyah said.
The Philippine peso was the sole bright spot in the region this week due to a boost in remittances before Christmas. Money sent home by Filipinos living abroad accounts for about 10 percent of GDP.
The peso rose 0.9 percent from Nov. 28 to 44.528 per US dollar, Tullett Prebon PLC prices show.
Elsewhere in Asia, the baht fell 0.2 percent to 32.927 per US dollar, the yuan dropped 0.08 percent to 6.1502, India’s rupee rose 0.3 percent to 61.8500 and the dong advanced 0.2 percent to 21,345.
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