India’s rupee and South Korea’s won led declines in Asian currencies this week on concern higher commodity prices will slow the global economic recovery, hurting exports and curbing demand for emerging-market assets, while the Singapore dollar climbed to a record after a revaluation.
Overseas investors sold US$591 million more South Korean and Taiwanese shares than they bought in the week, exchange data show.
The yuan hit a 17-year high on Friday as China reported bigger-than-expected increases in GDP and consumer prices.
“People are taking risk off the table as there are still uncertainties in Japan and because of strong commodity prices,” said Roland Randall, a senior currency strategist at TD Securities Inc in Singapore.
The rupee dropped 0.6 percent this week to 44.333 per US dollar. The won weakened 0.6 percent to 1,089.80 and the New Taiwan dollar fell 0.2 percent to NT$29.050, according to Taipei Forex Inc. The Singapore dollar rose 1 percent to S$1.2452 after the city-state’s central bank said on Thursday it would allow faster gains to combat inflation.
Japan’s government cut its assessment of the economy for the first time in six months on Wednesday, after a record earthquake and ensuing tsunami last month killed more than 12,000 people.
The yuan gained 0.05 percent this week to 6.5325 per US dollar, according to the China Foreign Exchange Trade System. It touched 6.5290 on Friday, the strongest level since the country unified official and market exchange rates at the end of 1993, on speculation policymakers will allow gains to tame inflation.
“The inflation problem is getting more complicated because it’s not only about domestic costs, but rising import bills as well,” said Kenix Lai (賴春梅), a foreign-exchange analyst at Sun Hung Kai Securities Ltd (新鴻基證券) in Hong Kong. “China needs a package of tools, including currency appreciation, to deal with the price pressure.”
The won retreated from a 31-month high and Thailand’s baht fell from its strongest level of the year on concern policymakers would intervene to combat appreciation.
The baht declined 0.3 percent in the first two days of the week to 30.14 per US dollar. Financial markets in Thailand were closed for the last three days of the week for public holidays.
Elsewhere, Philippine peso slid 0.6 percent to 43.24 for the week, Indonesia’s rupiah dropped 0.2 percent to 8,663 and Malaysia’s ringgit slipped 0.2 percent to 3.0235.
EURO, YEN DROP
The euro fell the most since November against the yen and dropped from a 15-month high versus the US dollar on concern a bailout for Greece may fail to prevent the first default by a country in the 17-nation currency region.
New Zealand’s dollar surged this week to a three-year high versus the greenback on speculation accelerating inflation won’t hamper the economy.
The US currency touched the lowest level this month versus the yen on bets the US Federal Reserve will reaffirm after its April 26-April 27 meeting its plan to keep borrowing costs low to support the economic growth.
“The risk premium in the periphery has re-emerged,” said Mark McCormick, a currency strategist at Brown Brothers Harriman & Co in New York. “People are becoming concerned with the probability of countries like Greece and Ireland having to potentially restructure their debt.”
The euro fell 2.3 percent to ￥119.96 on Friday, from ￥122.76 on Friday last week, in the biggest weekly decrease since a 2.5 percent drop in the five days ended on Nov. 26 last year.
The euro depreciated 0.4 percent to US$1.4430, from US$1.4483, after rising above US$1.45 for the first time since January last year.
The dollar dropped 1.9 percent to ￥83.13, from ￥84.76, after touching ￥82.96 this week, the lowest level since March 31.
The Canadian dollar slid from a three-year high versus the greenback, dropping for the first time since the week ended March 18.
The Bank of Canada held its target-lending rate at 1 percent at its meeting on Tuesday and said currency appreciation “could create even greater headwinds” for the economy.
The loonie slid 0.4 percent to C$0.9592 versus the greenback after touching C$0.9527 on Friday last week, the strongest level since November 2007.
The New Zealand dollar rallied as New Zealand Minister of Finance Bill English said on Friday that the nation’s accelerating inflation wouldn’t hamper the economy. Reserve Bank of New Zealand Governor Alan Bollard said this week the economy will get a boost from higher farm export prices, which will underpin the nation’s currency and may stir inflation.
The kiwi appreciated 2.1 percent to US$0.7995 after touching US$0.7997 on Friday, the highest level since April 2008.
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