The euro fell this week, heading for its worst week against the yen in two months, after Handelsblatt reported the IMF is discussing aid programs with at least 10 Eastern European governments.
The euro weakened versus 12 of its 16 major counterparts after the German newspaper cited unidentified IMF officials as saying the countries applying for loans for the first time included Bulgaria, Croatia and Macedonia.
The yen and the dollar rose against most major currencies as US stock futures fell, boosting demand for safer assets. The euro also dropped before a French report that economists said will show industrial output slid for a ninth month.
“There are lingering worries over the financial health of eastern and central European countries,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co in Tokyo. “Investors are still risk averse, so they’re likely to sell the euro and buy the yen and dollar as safe-haven currencies.”
The euro declined to ¥129.79 as of 7:02am in London from ¥130.36 on Thursday in New York, set for a 3.3 percent loss in the past week, the biggest since the period ended May 15. The euro dropped to US$1.3966 from US$1.4020. Japan’s currency was little changed at ¥92.95 per US dollar from ¥92.99.
India’s rupee and Malaysia’s ringgit led losses in Asian currencies this week as reports showed shrinking global demand for the region’s goods, damping the outlook for an economic recovery.
The rupee had its biggest weekly loss since February after the government projected the budget deficit will widen to the highest in 16 years as India spends more to boost growth. Malaysia’s currency had its worst week in almost five months as exports and factory production extended a slump into May. Japanese machinery orders unexpectedly shrank in May and Taiwan’s overseas sales fell for a 10th straight month last month.
“There was quite a bit of apprehension in the markets,” said Vishnu Varathan, a regional economist at Forecast Singapore Pte. “With the first half coming to an end, funds were trying to pull back a bit. They weren’t sure about the trajectory that was put forth earlier on the global economic recovery.”
The rupee dropped 2.3 percent this week to 49.005 per US dollar in Mumbai, according to data compiled by Bloomberg.
The ringgit declined 1.4 percent to 3.5775. It touched 3.5855 on July 9, the lowest level since April 29.
The won slid 1.3 percent to 1,282.50 in Seoul.
The New Taiwan dollar dropped 0.5 percent this week to NT$33.05 against the US currency.
Elsewhere, the Singapore dollar weakened 0.6 percent this week to S$1.4623, the Philippine peso fell 0.4 percent to 48.30 and the Thai baht was unchanged at 34.08.