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Sun, Aug 29, 2010 - Page 10 News List

Won leads weekly drop in Asia on US growth concern

BLOOMBERG

Asian currencies declined this week, led by South Korea’s won, on concern demand for the region’s exports will fall as the economic recovery in the US falters.

The Bloomberg-JPMorgan Asia Dollar Index dropped 0.2 this week before revised figures from the government showed the economic recovery in the US weakened in the second quarter more than previously estimated. Investors withdrew US$7.1 billion from global equity funds in the week to Wednesday, including US$289 million from Asia ex-Japan stock funds, Cambridge, Massachusetts-based research firm EPFR Global said in an e-mail.

“The impact of the weaker outlook may have some repercussions for largely export-oriented economies,” said Joey Cuyegkeng, a Manila-based economist at ING Groep NV, the largest Dutch financial services company. “Once the weak data in the developed economies are out and have been discounted, I think investors will flood back into Asia.”

The South Korean won slid 1.1 percent this week to 1,196.76 per dollar in Seoul as overseas investors sold US$264 million more South Korean shares than they bought. The Indian rupee declined 0.5 percent to 46.91, the Philippine peso lost 0.4 percent to 45.195, and the Indonesian rupiah dropped 0.5 percent to 9,020.

The New Taiwan dollar declined this week and bonds rose as overseas investors cut holdings of the nation’s stocks on concern a slowing US economy will hurt Asia’s recovery.

The NT dollar dropped 0.3 percent this week to close at NT$32.03 against the greenback on Friday, according to Taipei Forex Inc.

The Chinese yuan fell 0.1 percent this week to 6.7974 against its US counterpart, while the ringgit dropped 0.2 percent to 3.1465.

The US dollar fell for a second week against the yen after reports showed the recovery in the world’s largest economy may be faltering, boosting the Japanese currency’s attraction as a refuge.

The yen touched a 15-year high this week as purchases of existing homes in the US tumbled twice as much as forecast, new-home sales unexpectedly fell and durable-goods orders rose less than anticipated.

The greenback fell 0.5 percent to ¥85.22 in New York, from ¥85.62 in the week ended Aug. 20. It touched ¥83.60 on Tuesday, its weakest level since 1995, and was headed for a 1.4 percent loss for the month. The US dollar lost 0.4 percent to US$1.2763 per euro, from US$1.2712 a week earlier. The yen rose 0.1 percent to ¥108.72 per euro, from ¥108.83.

The Swiss franc ended the week up 0.2 percent to SF1.3119 per euro, after touching a record high SF1.2972 on Wednesday.

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