Asian currencies fell, led by the Philippine peso, as losses related to US mortgages curbed investor appetite for emerging-market assets. |
The Malaysian ringgit approached a two-week low after Germany's IKB Deutsche Industriebank AG said yesterday it will post a loss of up to 700 million euros ($953 million) from investments in subprime loans. All Asian currencies slid against the dollar, the yen and the euro. |
"The bias is for the dollar to appreciate against Asian currencies,'' said Leslie Khoo, an economist at Forecast Ltd. in Singapore. ``Asia is still very vulnerable to risk aversion.'' |
The Philippine peso weakened 0.5 percent to 46.775 per dollar and the Malaysian ringgit fell 0.2 percent to 3.5090 as of 6 pm local time. South Korea's won dropped 0.2 percent to 939.20, according to Seoul Money Brokerage Services Ltd. It may fall to 950 in two months, said Khoo. |
The won is extending a 2.1 per cent drop last month as investors cut holdings of riskier assets on concern the US subprime mortgage crisis will slow global growth. They sold a net $67.2 million shares today, a sixth day of sales, according to the stock exchange, snapping a three-day rally in the Kospi Index. |
The Philippines sold fewer bonds at an auction as investors demanded higher yields for the risk of holding emerging-market debt. |
The government sold 5.93 billion pesos ($127 million) of a planned 7 billion pesos of bonds due in September 2027 at a yield of 8.625 percent, compared with the 8 percent rate for December 2026 bonds it auctioned on December 5. |
Export Concern |
Asian currencies also fell on signs demand for the region's exports will ease as the U.S. economy slows. Malaysian exports unexpectedly declined for a second month in July, slipping 0.02 percent from a year earlier. Economists expected a 0.6 percent increase. |
``The ringgit is on a weaker tendency,'' said Suresh Kumar Ramanathan, a currency strategist at CIMB Investment Bank Bhd. in Kuala Lumpur. ``The U.S. will probably indicate slower growth in the quarters ahead. Export-dependent economies in Asia could be in a rocky boat.'' |
The Indonesian rupiah fell 0.2 percent to 9,408 per dollar. The Singapore dollar slipped 0.3 percent to S$1.5270 and the Thai baht was unchanged at 34.30 onshore. The Taiwan dollar weakened 0.1 percent to NT$33.025 and the Vietnam dong was at 16,242. |
``I'm still looking at the Indonesian rupiah from a risk aversion point of view,'' said Philip Wee, a senior currency economist at DBS Bank Ltd. in Singapore. ``The hope is that Asian currencies will stabilise.'' |