VIETNAM - Asian Currencies Weaken on Concern Europe’s Woes to Slow Global Recovery

by lexie Wed Feb 22, 2012 11:58 am

February 22, 2012

Asian Currencies Weaken on Concern Europe’s Woes to Slow Global Recovery

Asian currencies snapped a two-day advance on concern Europe’s sovereign-debt crisis will damp demand for exports and slow a global recovery.

The Bloomberg-JPMorgan Asia Dollar Index fell the most in a week after Taiwan’s overseas shipments dropped more than predicted last month and economists forecast that data this week will show Singapore’s industrial output shrank for a second time in three months. Asian stocks retreated from a six-month high on concern Greece’s debt crisis will persist even after a second bailout.

“There are still lingering concerns emanating from Europe,” said Naveen Raghuvanshi, a currency trader at Development Credit Bank Ltd. in Mumbai.

Indonesia’s rupiah slipped 0.3 percent to 9,050 per dollar in Jakarta, according to prices from local banks compiled by Bloomberg. The Philippine peso dropped 0.2 percent to 42.645 and the ringgit was little changed at 3.0250.

European finance ministers approved 130 billion euros ($172 billion) in aid for Greece by tapping into European Central Bank profits and coaxing investors into providing more debt relief to shield the region from a default. Greece’s debt may still balloon to 160 percent of gross domestic product in a worst-case scenario, analysis by the International Monetary Fund and European officials indicated.
Consumer Prices

An agreement “doesn’t really mean the Greek problem will be fundamentally solved,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo.

The rupiah slid for the first time in three days after finance ministry data showed global funds sold 3.3 trillion rupiah ($365 million) more Indonesian bonds than they bought last week.

The ringgit slipped from a one-week high before the government unveils inflation data for January tomorrow. Consumer prices rose 2.7 percent from a year earlier, the least in a year, according to the median forecast of economists in a Bloomberg News survey.

Taiwan’s dollar weakened 0.1 percent to NT$29.568 per dollar after a government report yesterday showed the island’s exports fell 8.6 percent in January, compared with economists’ forecast for a 4.8 percent drop.

Elsewhere, Singapore’s dollar slumped 0.4 percent to S$1.2565, and the Thai baht declined 0.1 percent to 30.76. China’s yuan gained 0.1 percent to 6.2964, Vietnam’s dong gained 0.8 percent to 20,868, and South Korea’s won rose 0.1 percent to 1,122.70 per dollar. (Bloomberg)

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