Singapore: South Korea's won and India's rupee declined the most among Asian currencies last week on concern China's economic slowdown and Europe's debt crisis will deter investors from buying emerging-market assets.

Goldman Sachs Group lowered China's growth forecast for this year in a research report on Friday. Confidence among US consumers sank more than economists forecast this month, while household spending and wages in Japan declined in May, according to reports last week.

The MSCI Asia Pacific Index fell 3.4 per cent last week, the most since the period ended May 21.

"The bottom line is, risk indicators are still high," said Mitul Kotecha, the Hong Kong-based head of global foreign exchange strategy at Credit Agricole CIB. "We're still in a consolidation phase."

The won fell 1.1 per cent last week to close at 1,228.75 per dollar in Seoul. The rupee declined by as much, completing the worst week in more than a month, to 46.79, after a central bank report on June 30 showed the nation's current-account deficit widened to a record. Taiwan's dollar weakened 0.3 per cent to NT$32.278 on signs the central bank intervened to help exporters.

Goldman economists Yu Song and Helen Qiao said they lowered China's 2010 economic growth forecast to 10.1 per cent, from 11.4 per cent. Consumers in China and the US are the biggest overseas buyers of South Korean goods.

Current account

The Reserve Bank of India said the current account, a measure of trade and investment flows, posted a $13 billion (Dh47 billion) shortfall last quarter, more than twice the $5.75 billion median estimate of economists surveyed by Bloomberg News. The nation has become more vulnerable to global slowdowns and financial crises as foreign trade plays a bigger role in the economy, the bank said in a separate report on July 1.

"There are near-term weakening pressures on the rupee, exacerbated by external uncertainties," Pranjul Bhandari and Tushar Poddar, Mumbai-based analysts at Goldman Sachs, wrote in a research note. "We believe the current-account deficit will remain high this fiscal year. On a six- to 12-month horizon, however, we expect higher growth and rates to drive inflows and appreciation of the rupee."

Malaysia's ringgit gained 0.3 per cent yesterday and strengthened 0.8 per cent last week to 3.2250 per dollar. The country's exports climbed at an annual rate of 21.9 per cent in May, after rising 26.6 per cent in April, the trade ministry said in a statement in Kuala Lumpuron Friday.