Home / World Business
Sun, May 11, 2008 - Page 10 News List

Won leads drop in Asian currencies


Asian currencies fell this week, led by South Korea’s won, on speculation record oil prices will damp the region’s economic growth and the US Federal Reserve may have finished cutting interest rates.

All 10 of Asia’s most-active currencies outside Japan weakened against the dollar in the past five days as investors shunned emerging-market assets and crude oil climbed to an all-time high. The MSCI Asia-Pacific Index of regional shares fell the most in almost two months while HSBC Holdings Plc’s Asian Bond Index declined 1.5 percent, extending losses to a fourth week. The won had the biggest weekly loss in two months and India’s rupee fell to the lowest since August.

“The dollar rally pushed Asian currencies weaker,” said Goh Puay Yeong, a Singapore-based strategist at Barclays Capital, the securities arm of the UK’s third-biggest bank. “Higher oil prices are spooking the market in terms of creating worries the economic slowdown will be more than expected.”

The won declined 3.5 percent this week to 1,044.70 to the US dollar, Seoul Money Brokerage Services Ltd said. The rupee fell 2.3 percent in week to 41.60.

Federal Reserve Bank of Kansas City president Thomas Hoenig said this week “serious” inflation pressures may prompt the US central bank to raise interest rates. Fed futures were on Friday pricing in an 82 percent chance policymakers would keep borrowing costs on hold at their June 25 meeting, compared with a 12 percent chance a month ago.

The Philippine peso declined for a fourth week on speculation accelerating inflation will reduce demand for the nation’s assets.

The currency lost 0.3 percent this week to 42.48 per dollar, the Bankers Association of the Philippines said. It gained 0.3 percent on Friday, snapping a three-day decline.

Elsewhere, the New Taiwan dollar fell 0.7 percent to NT$30.653 this week. The Singapore dollar dropped 0.4 percent to S$1.3685, while the Indonesian rupiah declined 0.1 percent to 9,236 and the Vietnamese dong fell 0.2 percent to 16,146.

This story has been viewed 1834 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top