Rupiah leads Asian currencies’ decline on Fed taper speculation: KUALA LUMPUR, Sept 7 — Asian currencies fell this week, led by the Indonesian rupiah’s decline to a four-year low, on concern signs of a US economic recovery would support a reduction in stimulus that has fuelled emerging-market inflows. US service industries grew in August at the fastest pace in almost eight years, strengthening the case for tapering when the Federal Reserve meets September 17-18 to review its bond-buying programme. Barclays Plc says yields on 10-year Treasuries, which touched a two-year high, will lure investors as exchange data show global funds pulled US$141 million (RM464.2 million) from Indian, Indonesian, Philippine and Thai stocks this week. Asian markets closed yesterday before a report showed US payrolls rose less than expected, easing concern about the size of potential cuts to Fed bond purchases. “The battle, which all currencies in Asia are facing, is rising US Treasury yields and the Fed meeting later in the month,” said Hamish Pepper, a currency strategist at Barclays in Singapore. “Ultimately, that’s going to cap any appreciation in Asian currencies in the near term.” The rupiah declined 2.3 per cent this week to 11,175 per dollar and reached a four-year low of 11,205 earlier, prices from local banks show. Malaysia’s ringgit weakened 1.3 per cent to 3.3290 and the Thai baht retreated 0.7 per cent to 32.380. Morgan Stanley lowered its 2013 and 2014 growth forecasts for the four largest Southeast Asian economies of Indonesia, Malaysia, Singapore and Thailand, citing a weaker-than-expected first half and an uncertain outlook, Singapore-based economist Deyi Tan wrote in a September 3 note. Indonesia, Malaysia Indonesia’s trade deficit reached a record US$2.3 billion in July as exports fell on lower global commodity prices, official data showed September 2. The nation’s current-account shortfall will narrow in the third quarter, from about 4.4 per cent of gross domestic product in the previous three months as a slowing economy and higher fuel prices curb imports, Finance Minister Chatib Basri said in a September 5 interview. The ringgit had its biggest weekly loss in five on speculation outflows will accelerate should the Fed begin tapering stimulus this month. Foreign holdings of Malaysian government and corporate debt securities fell 5.7 per cent in July to RM216 billion (US$65 billion), the biggest drop since September 2011, the latest central bank figures show. Prime Minister Najib Razak raised fuel prices on September 3, the first increase since 2010, and delayed some state building projects with high import content to address a shrinking current-account surplus. The measures came after Fitch Ratings said that Malaysia faced the prospect of a rating cut due to its weak fiscal position. Won advances The Bloomberg-JPMorgan Asia Dollar Index climbed 0.2 per cent this week to 114.45, as the South Korean won rallied 1.6 per cent to 1092.93 per dollar. The Indian rupee rose 0.7 per cent to 65.25 and Taiwan’s dollar gained 0.3 per cent to NT$29.9. President Barack Obama was seeking diplomatic backing for a US military strike on Syria as he attended a meeting of the Group of 20 nations in St. Petersburg, Russia. Non-farm payrolls in the world’s largest economy increased by 169,000 in August, missing the 180,000 median estimate of economists in a Bloomberg survey, a report showed yesterday. “The biggest focus in the market now is the US employment data to assess the outlook for the Fed’s reduction in stimulus,” Hideki Hayashi, a researcher at the Japan Centre for Economic Research in Tokyo, said before the data. “Emerging-market currencies and assets are under downward pressure at this moment. Syria tensions are adding to weak sentiment.” Elsewhere in Asia, China’s yuan was little changed this week at 6.1205 per dollar, the Philippine peso climbed 0.3 per cent to 44.475 and Vietnam’s dong rose 0.1 per cent to 21,125. — Bloomberg dlvr.it/3wYtBP
Posted on: Sat, 07 Sep 2013 05:28:05 +0000
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