The euro fell this week, heading for its worst week against the yen in two months, after Handelsblatt reported the IMF is discussing aid programs with at least 10 Eastern European governments.
The euro weakened versus 12 of its 16 major counterparts after the German newspaper cited unidentified IMF officials as saying the countries applying for loans for the first time included Bulgaria, Croatia and Macedonia.
The yen and the dollar rose against most major currencies as US stock futures fell, boosting demand for safer assets. The euro also dropped before a French report that economists said will show industrial output slid for a ninth month.
“There are lingering worries over the financial health of eastern and central European countries,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co in Tokyo. “Investors are still risk averse, so they’re likely to sell the euro and buy the yen and dollar as safe-haven currencies.”
The euro declined to ¥129.79 as of 7:02am in London from ¥130.36 on Thursday in New York, set for a 3.3 percent loss in the past week, the biggest since the period ended May 15. The euro dropped to US$1.3966 from US$1.4020. Japan’s currency was little changed at ¥92.95 per US dollar from ¥92.99.
India’s rupee and Malaysia’s ringgit led losses in Asian currencies this week as reports showed shrinking global demand for the region’s goods, damping the outlook for an economic recovery.
The rupee had its biggest weekly loss since February after the government projected the budget deficit will widen to the highest in 16 years as India spends more to boost growth. Malaysia’s currency had its worst week in almost five months as exports and factory production extended a slump into May. Japanese machinery orders unexpectedly shrank in May and Taiwan’s overseas sales fell for a 10th straight month last month.
“There was quite a bit of apprehension in the markets,” said Vishnu Varathan, a regional economist at Forecast Singapore Pte. “With the first half coming to an end, funds were trying to pull back a bit. They weren’t sure about the trajectory that was put forth earlier on the global economic recovery.”
The rupee dropped 2.3 percent this week to 49.005 per US dollar in Mumbai, according to data compiled by Bloomberg.
The ringgit declined 1.4 percent to 3.5775. It touched 3.5855 on July 9, the lowest level since April 29.
The won slid 1.3 percent to 1,282.50 in Seoul.
The New Taiwan dollar dropped 0.5 percent this week to NT$33.05 against the US currency.
Elsewhere, the Singapore dollar weakened 0.6 percent this week to S$1.4623, the Philippine peso fell 0.4 percent to 48.30 and the Thai baht was unchanged at 34.08.
CHANGE OF MIND: The Chinese crew at first showed a willingness to cooperate, but later regretted that when the ship arrived at the port and refused to enter Togolese Republic-registered Chinese freighter Hong Tai (宏泰號) and its crew have been detained on suspicion of deliberately damaging a submarine cable connecting Taiwan proper and Penghu County, the Coast Guard Administration said in a statement yesterday. The case would be subject to a “national security-level investigation” by the Tainan District Prosecutors’ Office, it added. The administration said that it had been monitoring the ship since 7:10pm on Saturday when it appeared to be loitering in waters about 6 nautical miles (11km) northwest of Tainan’s Chiang Chun Fishing Port, adding that the ship’s location was about 0.5 nautical miles north of the No.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
COORDINATION, ASSURANCE: Separately, representatives reintroduced a bill that asks the state department to review guidelines on how the US engages with Taiwan US senators on Tuesday introduced the Taiwan travel and tourism coordination act, which they said would bolster bilateral travel and cooperation. The bill, proposed by US senators Marsha Blackburn and Brian Schatz, seeks to establish “robust security screenings for those traveling to the US from Asia, open new markets for American industry, and strengthen the economic partnership between the US and Taiwan,” they said in a statement. “Travel and tourism play a crucial role in a nation’s economic security,” but Taiwan faces “pressure and coercion from the Chinese Communist Party [CCP]” in this sector, the statement said. As Taiwan is a “vital trading
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