Asian currencies posted a weekly decline, led by the Philippine peso, after a contraction in Europe’s economy added to concern a global slowdown will damp demand for emerging-market assets.
The peso had its worst week in a year as overseas investors sold more of the country’s stocks than they bought for the past 14 days. All the 10 most-traded Asian currencies fell last week as government reports showed Europe and Japan’s economies both contracted in the second quarter and the Bank of England cut its UK growth forecast, citing a “chill in the economic air.”
“The peso will depreciate in the short term as risk aversion seems to have made a comeback in emerging markets with the selling in stocks,” said Ricky Cebrero, a treasurer at East West Banking Corp in Manila.
The peso slumped 2.2 percent this week to 45.310 per dollar in Manila yesterday, Tullett Prebon Plc said. The decline is the most since the five days ended on Aug. 17 last year. The peso could reach 45.50 in “coming sessions,” Cebrero said.
The New Taiwan dollar dropped for a fourth week on concern a slowing world economy would cut demand for the country’s exports.
The currency has dropped every day this month except one as the government reported its first trade deficit since 2006. The Taiwan dollar’s decline was caused by foreign fund outflows, the Chinese-language Commercial Times newspaper reported on Friday, citing an unidentified central bank official.
“Taiwan will underperform relative to the rest of the region as the global slowdown unfolds,” said Daniel Hui, a currency strategist at HSBC Holdings Plc in Hong Kong. “The US dollar is rebounding because the outlook for the rest of the world is basically being downgraded,” he said.
The currency fell 0.8 percent last week to NT$31.330, after touching NT$31.405 on Friday, the weakest since Feb. 25. It has fallen 3.1 percent in the past month.
Singapore’s dollar posted its fourth weekly decline as the government lowered its export and growth forecasts, predicting a “bumpy year.”
The local currency fell 1.3 percent last week to S$1.4167 against the US dollar. It lost 0.5 percent on Friday.
The ringgit fell 1.4 percent last week to 3.3490 per dollar.
Elsewhere, the Indonesian rupiah lost 0.2 percent last week to 9,190 per dollar, the Thai baht declined 0.4 percent to 33.84 and Vietnam’s dong weakened 0.3 percent to 16,600.
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