Indonesia’s rupiah and Thailand’s baht led declines in Asian currencies
on concern that a slump in US manufacturing will deter risk-taking ahead of a
European Central Bank policy meeting tomorrow.
The euro weakened against the
dollar even after ECB President Mario Draghi said this week that the bank’s
primary mandate compels it to intervene in bond markets to ensure the common
currency’s survival. US factory output shrank last month by the most since July
2009, a report showed yesterday.
“The weak US data is used as an
excuse for position adjustment from the recent declines in the dollar before
big events like ECB and jobs data in the US,” said Shigehisa Shiroki, chief
trader on the Asian and emerging-markets team at Mizuho Corporate Bank in
Tokyo. “The drop in regional currencies is limited as funds will eventually
come to Asia, where domestic demand remains solid.”
Indonesia’s rupiah fell 0.2
percent to 9,589 per dollar as of 10:02 a.m. in Jakarta, according to prices
from local banks compiled by Bloomberg. The baht declined 0.2 percent to 31.26,
while South Korea’s won and Malaysia’s ringgit each had losses of about 0.1
percent.
The Bloomberg-JPMorgan Asia
Dollar Index, which tracks the region’s 10 most-used currencies excluding the
yen, was set for its lowest close in almost a week.
The US Institute for Supply
Management’s factory index fell to 49.6 last month from 49.8 in July, the
Tempe, Arizona-based group said. Economists in a Bloomberg survey projected a
reading of 50, which is the dividing line between expansion and contraction.
Measures of orders and production dropped to three-year lows.
Baht, Won
The baht snapped three days of
gains after the report. The US, Thailand’s third-largest export market, bought
about 10 percent of goods shipped from the Southeast Asian nation in the first
seven months of this year. Overseas sales, which account for about two-thirds
of the Thai economy, decreased 3.9 percent in July from a year earlier after a
2.4 percent slide in June, according to central bank data.
The won weakened for a second day
to trade at 1,134.68 per dollar as the Kospi Index of shares headed for its
lowest close since Aug. 3. South Korea plans to announce economic stimulus
measures next week without increasing the budget, Finance Minister Bahk Jae Wan
said yesterday.
“The euro declining before the
ECB meeting and local share losses after US manufacturing data are all
contributing to risk-aversion sentiment in the market, weakening the won,” said
Cho Young Bok, a Seoul-based currency trader for Daegu Bank. Reserves, Exports
South Korea’s foreign-exchange
reserves rose $2.53 billion to a record $316.88 billion in August, the biggest
increase in six months, according to central bank figures released today.
The ringgit fell to 3.1110
against the greenback, ending a two-day rally, ahead of data forecast to show
that export growth slowed in Southeast Asia’s third-largest economy.
Overseas shipments rose 3.5
percent in July from a year earlier after climbing 5.4 percent in June,
according to the median estimate of economists in a Bloomberg News survey
before a government report due Sept. 7.
“Slowing export growth will be a
concern, especially after the ISM index in the US disappointed yesterday,” said
Philip Wee, a senior currency economist in Singapore at DBS Group Holdings Ltd.
“The ringgit will remain in this range.”
Elsewhere in Asia, the Philippine
peso dropped 0.1 percent to 41.94 per dollar, China’s yuan traded at 6.3499
compared with 6.3473 yesterday, while Taiwan’s dollar rose 0.2 percent to
NT$29.855.
Bloomberg
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