Asian currencies declined this week after reports in Taiwan, Malaysia, the Philippines and China showed exports slumped as the global slowdown reduced consumer spending overseas.
South Korea’s won led the losses after the central bank cut its benchmark interest rate to a record on Thursday to revive an economy headed for the first recession in more than a decade. Investor appetite for riskier emerging-market assets has faded this year, sending eight of the 10 most-active Asian currencies lower against the US dollar. A regional gauge of stocks has dropped more than 8 percent this year.
“Most Asian currencies will continue to weaken at least through to the middle of this year,” said David Mann, senior foreign-exchange strategist at Standard Chartered PLC in Hong Kong. “The worsening data in the region are likely to keep policy makers comfortable with seeing some weakness in their exchange rates.”
The New Taiwan dollar declined 0.9 percent this week to NT$34.05, near the weakest level since 2004.
The won declined 1.5 percent for the week to 1,404.20 per dollar, according to Seoul Money Brokerage Services. Indonesia’s rupiah fell 0.7 percent this week to 11,760.
The MSCI Asia-Pacific Index of regional shares lost 2 percent this week, snapping a two-week gain.
The peso rose 0.4 percent to 47.115 a dollar on Friday in Manila for a five-day gain of 0.2 percent, according to Tullett Prebon PLC.
The Philippine currency may still weaken to 49 by the end of the quarter as exports and remittances from Filipinos working abroad falter, said Radhika Rao, an economist at IDEAglobal Ltd in Singapore.
The yen had its first weekly gain versus the euro in three weeks, trading at ¥117.96 from ¥118.85 a week ago. The dollar traded at ¥91.41 from ¥91.89 last week.
Elsewhere, the Thai baht depreciated 0.4 percent for the week to 35.14 and Malaysia’s ringgit dropped 0.3 percent to 3.6055 per US dollar. India’s rupee strengthened 0.08 percent to 48.6538, from 48.6950 a week ago. Vietnam’s dong was little changed at 17,484.5.
“Our outlook for the Taiwan dollar is still weak,” said Thio Chin Loo, senior currency strategist at BNP Paribas in Singapore. Regarding the US stimulus plan, she said “the situation is still gloomy, which supports the dollar against Taiwan.”
The euro slipped slightly against the US dollar on Friday after dismal eurozone data and as G7 finance chiefs began a two-day meeting on the spreading global financial crisis.
The euro was at US$1.2856 at 10pm GMT after US$1.2861 late on Thursday in New York.
The euro spent the week trading in a narrow band around US$1.30.
“Any sign of optimism that is able to bubble up in the markets recently has been consistently battered down by fading returns and the constant sense of risk looming over investors heads,” John Kicklighter at Forex Capital Markets said.
In late New York trading, the US dollar fell to 1.1622 Swiss francs from SF1.1630 late on Thursday.
The pound rose to US$1.4349 from US$1.4266.