Seoul: Asian currencies traded near a 20-month low after data on US jobs and non-manufacturing industries in China added to concern the global economy is deteriorating.
The MSCI Asia-Pacific Index of shares slid for a fourth day, after data on June 1 showed American employers added 69,000 workers last month, the fewest in a year. China’s non-manufacturing industries expanded at the slowest pace in more than a year, an official survey showed on Sunday. Federal Reserve Chairman Ben S. Bernanke will testify to a congressional committee about the outlook for the world’s largest economy this week, while the Reserve Bank of Australia and the European Central Bank meet to review rates.
“Last Friday’s weak US number was definitely a factor hitting the market,” said Goh Puay Yeong, a Singapore-based foreign-exchange strategist at Credit Suisse Group. “Markets may also be starting to factor expectations for some quantitative easing. People may be watching this Bernanke testimony. There might be some policy response from central banks.”
South Korea’s won weakened 0.4 per cent to 1,182.03 per dollar at the close in Seoul, according to data compiled by Bloomberg. Taiwan’s dollar fell 0.4 per cent to NT$30.050 and the Philippine peso declined 0.2 per cent to 43.482.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, was at 114.03 after touching 113.68 on June 1, the lowest level since September 2010. The MSCI Asia-Pacific Index lost 2.1 per cent, taking its four-day drop to 4.1 per cent. China’s purchasing managers’ index on non-manufacturing industries fell to 55.2 in May from 56.1 in April, the statistics bureau and logistics federation said.
Taiwan exports:
The won fell as the Kospi index of shares slid the most in two weeks. South Korea will focus policy efforts more on boosting economic growth and allocate additional state funds to support small companies and exporters, Finance Minister Bahk Jae Wan said. The central bank will hold borrowing costs at 3.25 per cent for a 12th month on Friday, according to all 11 economists surveyed by Bloomberg News.
Taiwan’s dollar weakened for a fourth day before official data on Thursday that will show exports decreased 5.3 per cent in May from a year earlier, according to the median estimate of economists in a Bloomberg news survey.
Rebound temporary:
Malaysia’s ringgit rose for the first time in a week, rebounding from an eight-month low, as some investors judged recent declines excessive. The currency has had five weekly drops in a row as China's slowing economy dimmed the export outlook and Europe’s debt crisis bolstered demand for dollars. The 14-day relative strength index for Malaysia's exchange rate ended last week at 81, above the 70 threshold that signals to some traders a change in direction is likely.
“All of this is a pause in what's been a lot of negative news recently,” said Christopher Gothard, head of foreign exchange at Brown Brothers Harriman (Hong Kong) Ltd. “However, I don't think the overall situation has improved so we wouldn’t expect any rebound in Asian currencies to last.”
The ringgit strengthened 0.3 per cent to 3.1995 per dollar in Kuala Lumpur, according to data compiled by Bloomberg. It touched 3.2103 on June 1, the weakest level since October 5.
Elsewhere, Indonesia’s rupiah advanced 0.5 per cent to 9,479 per dollar, China's yuan gained 0.07 per cent to 6.3644 and Vietnam’s dong weakened 0.1 per cent to 20,898.
