Indonesia’s rupiah posted the biggest loss among Asian currencies this week as a US budget agreement and improving economic data added to speculation the Federal Reserve would taper stimulus.
The Bloomberg-JPMorgan Asia Dollar Index dropped 0.3 percent in the past five days, its worst week in more than a month. US retail sales climbed last month by the most since June, a report on Thursday showed, as the US House of Representatives passed a bipartisan budget that will ease automatic spending cuts, reduce the deficit and avert another government shutdown.
“People are now pricing in a bigger chance of Fed tapering in December, especially since US retail sales data was very strong,” said Trang Thuy Le, a Singapore-based currency strategist at Credit Suisse.
The fact that the US budget is “no longer an issue means the Fed can easily start tapering in December,” she said.
The rupiah fell 1.3 percent from Dec. 6 to 12,118 per US dollar in Jakarta, taking its drop since the end of October to 7 percent, data compiled by Bloomberg show.
India’s rupee lost 1.1 percent to 62.1250 during the five days, snapping a three-week gain.
Indonesia’s current-account deficit helped make the rupiah Asia’s worst-performing currency this year. The central bank held interest rates at 7.5 percent this week, the highest level in more than four years. Indonesia will keep its policy stance tight next year to restore investor confidence, Indonesian Senior Deputy Governor Mirza Adityaswara said in a Dec. 4 interview.
The New Taiwan dollar lost 0.1 percent to NT$29.689 this week.
The US dollar opened slightly higher on Friday, but selling from local exporters dragged down the unit. However, as it has done recently, Taiwan’s central bank entered the market late in the session to prop up the US dollar and help the currency recoup its earlier losses, dealers said.
South Korea’s won and the Thai baht also bucked the week’s losses, rising 0.5 percent to 1,052.55 and 0.3 percent to 32.052 respectively against the greenback.
The won appreciated 8.5 percent since the end of June, the biggest gain among the 11 most-traded Asian currencies tracked by Bloomberg. Asia’s fourth-largest economy posted a US$4.8 billion trade surplus last month, compared with a four-month high of US$4.9 billion in October.
The baht halted a six-week decline and touched the strongest level since Nov. 25 this week after Thai Prime Minister Yingluck Shinawatra dissolved parliament to defuse anti-government protests. An election is scheduled for February.
Elsewhere in Asia, the Philippine peso slipped 0.5 percent this week to 44.165 per US dollar and Malaysia’s ringgit dropped 0.1 percent to 3.2357, data compiled by Bloomberg show. China’s yuan climbed 0.17 percent to 6.0712 and Vietnam’s dong strengthened 0.1 percent to 21,110.
The US dollar also rose to the highest level against the yen in five years amid signs of faster US economic growth. The greenback climbed 0.3 percent to ￥103.21 this week in New York, and reached ￥103.92, the highest since October 2008.
The euro rallied 0.3 percent to US$1.3742, a fifth straight week of appreciation. Japan’s currency fell 0.6 percent to ￥141.87 per euro.
The Bloomberg US Dollar Index, which tracks the US currency against 10 major counterparts, was little changed at 1,016.79. The measure is up 3.1 percent this year.
The pound had the biggest weekly decline against the US dollar in six weeks after Bank of England officials sought to dampen speculation that they would raise interest rates sooner than they have previously indicated.
The pound fell 0.3 percent in the week to US$1.6296 at 4:54pm in London on Friday, the biggest drop since the five days through Nov. 1. It fell 0.5 percent to ￡0.8426 per euro, its second weekly decline.
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