Asian currencies fell last week, led by the South Korean won and the Indonesian rupiah, on speculation China will take more steps to curb inflation after economic growth accelerated to a three-year high.
The Bloomberg-JPMorgan Asia Dollar Index declined 0.7 percent last week, the biggest drop in eight months, on concern monetary tightening in China will damp a recovery in global trade. A proposal by President Barack Obama to reduce risk-taking by US financial institutions cooled demand for emerging-market assets, dragging regional stocks lower.
“The China bubble risk is a big source of fear for financial markets, particularly investors in risky assets around the world,” said Tim Condon, head of Asia research at ING Groep NV in Singapore. “Lower stocks in the US are going to mean knee-jerk selling in Asia and that is going to show up in a higher dollar against Asia ex-Japan currencies.”
The won fell 2.4 percent over the last five days to 1,150.85 per dollar in Seoul, Bloomberg data showed. Indonesia’s rupiah declined 1.7 percent to 9,359 and Malaysia’s ringgit dropped 1.7 percent to 3.3997.
The ringgit posted the biggest weekly drop since February and the rupiah had its steepest decline in seven months. The yuan fell 0.4 percent to 6.6315 per dollar, reflecting traders’ bets for a 2.9 percent gain in the currency in a year.
Elsewhere in Asian currency trading, Thailand’s baht weakened 0.4 percent last week to 32.99 and the Philippine peso declined 0.8 percent to 46.19.
The combined effect of the monsoon, the outer rim of Typhoon Fengshen and a low-pressure system is expected to bring significant rainfall this week to various parts of the nation, the Central Weather Administration (CWA) said. The heaviest rain is expected to occur today and tomorrow, with torrential rain expected in Keelung’s north coast, Yilan and the mountainous regions of Taipei and New Taipei City, the CWA said. Rivers could rise rapidly, and residents should stay away from riverbanks and avoid going to the mountains or engaging in water activities, it said. Scattered showers are expected today in central and
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