Peso leads decline as demand for assets dips

ASIAN CURRENCIES ROUND-UP

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.''