Asian currencies fell this week, led by the Malaysian ringgit’s slide to a six-year low, as a weakening growth outlook for China dimmed prospects for regional trade.
China set its lowest economic expansion target in more than 15 years after cutting interest rates for the second time in three months at the weekend. The Bloomberg Dollar Spot Index advanced for a third day before a report that is forecast to show US employers added more than 200,000 jobs for a 12th month and ahead of a Federal Open Market Committee (FOMC) meeting that starts on March 17.
“The general theme this week has been one of dollar strength as the focus shifted to non-farm payrolls today as well as the upcoming FOMC meeting,” Bank of Singapore Ltd foreign-exchange strategist Sim Moh Siong said. “There are also concerns about China’s slowdown and that has spilled over to Asian currencies.”
Photo: AFP
The ringgit lost 1.3 percent this week versus the US dollar, according to data compiled by Bloomberg.
The Singapore dollar fell 0.6 percent, India’s rupee declined 0.5 percent and Indonesia’s rupiah slipped 0.3 percent.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, retreated 0.1 percent.
Chinese authorities laid out plans for economic growth of about 7 percent for this year at the annual meeting of the legislature in Beijing on Thursday as they contend with a property slump, excess industrial capacity and disinflation.
The People’s Bank of China announced a cut of a quarter percentage point each in its key lending and deposit rates.
The yuan climbed 0.11 percent in the past five days after the nation’s leaders pledged stability for the currency and said they would encourage its global use.
US payrolls probably increased 235,000 last month, after gaining 257,000 in January, according to the median estimate in a Bloomberg survey before data due on Friday. A report from Roseland, New Jersey-based ADP Research Institute on Wednesday showed companies added 212,000 jobs last month.
The ringgit dropped as low as 3.663 per US dollar, the weakest since March 2009, as concerns persisted about the ability of state investment company 1Malaysia Development Bhd. to repay its borrowings. The central bank left its key interest rate unchanged for a fourth straight policy meeting on Thursday.
The rupee retreated as the central bank lowered interest rates in an unscheduled move on Wednesday. Thailand’s baht fell 0.2 percent versus the greenback and South Korea’s won depreciated 0.1 percent.
Elsewhere in Asia, the Philippine peso and the Vietnamese dong were little changed, while the New Taiwan dollar gained 0.2 percent to NT$31.450.
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