Asian currencies had the biggest weekly drop since November last year as concern Europe’s debt crisis would worsen spurred demand for US dollars amid signs the US and Chinese economies were losing momentum.
The Bloomberg-JPMorgan Asia Dollar Index fell 0.9 percent this week as global funds pulled about US$1.9 billion from stocks in Taiwan and South Korea. The won and Malaysia’s ringgit saw their biggest losses since September last year, while India’s rupee sank to an all-time low.
The New Taiwan dollar lost 0.7 percent to NT$29.63.
The won fell 2.2 percent from its May 11 close to 1,172.73 per US dollar in Seoul. The ringgit dropped 2 percent to 3.1350 in Kuala Lumpur. The rupee slid 1.5 percent to 54.4250 and Indonesia’s rupiah weakened 1.2 percent to 9,356.
“Investors are taking money out from riskier assets given the lingering concerns about Europe’s debt problem and the economic recovery outlook,” said Shigehisa Shiroki, chief trader on the Asian and emerging-markets team in Tokyo at Mizuho Corporate Bank. “It’s a double-whammy for Asian currencies as many countries depend on exports for growth.”
The Reserve Bank of India and Bank Indonesia have said they would buy their currencies to counter depreciation, while Bank Negara Malaysia said the country could weather any setbacks arising from Europe’s debt crisis.
“Strong market forces in favor of the dollar have created panic,” said J. Moses Harding, executive vice president at IndusInd Bank Ltd in Mumbai. “The Reserve Bank of India does not have enough ammunition to fight against the tsunami-like ferocious headwinds the rupee is facing.”
The yuan weakened 0.28 percent this week to 6.3284 per US dollar in Shanghai and touched 6.3307, the weakest level since March 15, according to China Foreign Exchange Trade System. The People’s Bank of China lowered its reference rate 0.41 percent to 6.3209, the biggest weekly decline since August 2010.
The central bank in Asia’s biggest economy cut lenders’ reserve requirements effective on Friday for the third time in six months to support the economy, which expanded in the first quarter at the slowest pace since mid-2009. Goldman Sachs Group Inc lowered its forecast for second-quarter growth to 7.9 percent from 8.5 percent, according to a research note published on Friday. The bank reduced its projection for this year to 8.1 percent from 8.6 percent.
Thailand’s baht dropped 0.5 percent this week to 31.33 per US dollar in Bangkok. A government report tomorrow may show the economy shrank 0.9 percent in the first quarter, according to the median estimate in a Bloomberg News survey of economists. GDP slumped 9 percent in the final three months of last year as the worst floods in almost 70 years damaged factories and crops.
The Philippine peso depreciated 1.6 percent to 43.247 against the greenback, while Vietnam’s dong dropped 0.1 percent to 20,848.
SLUMPING EURO
The euro fell for a third week against the US dollar, reaching a four-month low, after the failure of Greek leaders to form a government increased concern the debt crisis may spread to other nations in the eurozone.
The euro currency dropped for a fourth week against the yen as investors await a June 17 election in Greece and amid a G8 summit meeting that began on Friday. Higher-yielding currencies, including Brazil’s real, slumped as increased concern about the euro crisis damped demand for risk. The yen rose to a three-month high against the greenback.
“Given the recent past for Greece, investors are going to remain skeptical ahead of that mid-June election,” said Joe Manimbo, a market analyst in Washington at Western Union Co’s Western Union Business Solutions unit. “We could see continued political discord in Greece, something that would only increase worries about the debt crisis and likely keep borrowing costs for nations like Spain and Italy elevated.”
The euro lost 1.1 percent to US$1.2780, falling to US$1.2642, the weakest since Jan. 16. It has dropped 3.5 percent so far this month. The shared currency weakened 2.2 percent to ¥100.98, the most since the period ended on April 6. The Japanese currency appreciated ¥1.2 to ¥79.02 per US dollar and touched ¥79.00, the strongest since Feb. 17.
The pound fell against the euro, after earlier touching £0.7951, the strongest since November 2008, as the Bank of England (BOE) said UK growth would stay “subdued” in the near term. BOE Governor Mervyn King said the UK faced threats from the eurozone’s “storm” as he released the quarterly Inflation Report in London.
Sterling fell 0.5 percent to £0.8078 per euro and lost 1.6 percent to US$1.5817.
The Canadian dollar fell 2.1 percent to C$1.0222 against the greenback and the Mexican peso lost 1.8 percent to 13.8158 per US dollar.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors