Asian currencies had their biggest weekly loss since September on signs economic growth is faltering as European policy makers struggle to contain the region’s debt crisis.
The New Taiwan dollar weakened for a third consecutive week as global funds cut holdings of the island’s stocks on concern that Asia’s economic growth would be choked by the European debt crisis. Government bonds gained.
Foreign investors sold US$385 million more Taiwanese shares than they bought, taking net sales for the month to US$1 billion, according to exchange data. Benchmark 10-year bonds rallied as investors sought the relative safety of debt after Spanish securities sank, with yields rising to the highest since the euro was introduced.
“Bonds rose since there are some demands from investors for safe assets,” said Ivy Leung, a Taipei-based fixed-income trader at Polaris Securities Co (寶來證券). “Yields will continue to be led by movements in stocks. Volumes have been low as traders are still cautious about the uncertainties surrounding Europe.”
The NT dollar weakened 0.2 percent during the week to NT$30.257 against the US dollar, according to Taipei Forex Inc. It touched NT$30.29 on Thursday, the weakest level since Oct. 24.
The Bloomberg-JPMorgan Asia Dollar Index fell for a third week. South Korea’s won and India’s rupee led declines after data this month showed manufacturing slowed in China and Japan and exports slumped in Singapore and the Philippines.
Singapore and Thailand have trimmed growth forecasts this quarter and Indonesia unexpectedly cut interest rates by half a percentage point last week.
“The uncertainty that has been endemic from the turn of the year will continue to persist into year-end, especially with a resolution to the eurozone’s crisis appearing to be a long way off,” Mitul Kotecha, head of global currency strategy at Credit Agricole CIB in Hong Kong, wrote in a report released on Thursday.
“Commodities and emerging-market currencies will remain under pressure” in the short term, he wrote.
The won dropped 1.1 percent this week to 1,139.13 won per US dollar in Seoul, according to data compiled by Bloomberg. The rupee slid the most in eight weeks, losing 2.4 percent to 51.335, and Indonesia’s rupiah weakened 0.6 percent to 9,020.
The Singaporean dollar fell 0.4 percent to S$1.2953 against the US dollar.
Exports fell 16.2 percent last month from a year earlier, the worst performance in 30 months, the government said on Thursday. Shipments shrank 27 percent in the Philippines, the most since April 2009.
Thailand’s baht declined 0.5 percent to 30.99 per US dollar. The worst floods in almost 70 years have thumped consumer confidence, which dropped to a decade-low of 62.8 last month, according to data from the University of the Thai Chamber of Commerce.
India’s rupee weakened beyond 51 per US dollar on Friday, a level last seen in March 2009. Industrial production grew 1.9 percent in September, the least in two years, data showed on Nov. 11. The Reserve Bank of India may intervene to smooth rupee volatility, Deputy Governor Subir Gokarn told CNBC-TV18 TV channel on Thursday.
China’s yuan fell 0.2 percent to 6.3554 per US dollar in Shanghai for a second weekly loss.
Malaysia’s ringgit weakened 0.4 percent to 3.1608 per US dollar and the Philippine peso declined 0.2 percent to 43.382 per US dollar.
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