Asian currencies drop this week as Spain reignites debt concerns

Asian currencies declined this week, led by the Thai baht and rupee, as rising borrowing costs in Spain renewed concern over Europe’s debt crisis and after the Federal Reserve ruled out further monetary easing. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, slipped 0.2 per cent, the fifth weekly drop this year. Yields on Spain’s 10-year bonds rose to 5.76 per cent on Thursday, the highest level since December, on prospects the country will need European aid after signaling difficulty in reining in its budget deficit. Click here for Cloud Computing Also Read Related Stories News Now - Rupee gains 11 paise vs dollar in early trade - Rupee down 25 paise vs dollar in morning trade - Asian currencies pare weekly decline on Greece debt-swap deal - Asian currencies rise this week on US recovery - Asian currencies up for a fourth week on inflows, Fed outlook - Asian currencies strengthen for a third week, led by rupee, won “Preference for riskier assets weakened as expectations for stimulus policies retreated, and also because economic figures out of Europe this week were negative,” said Jeon Seung Ji, a Seoul-based currency analyst at Samsung Futures Inc. The baht fell 0.5 per cent to 31.01 per dollar and the rupee lost 0.4 per cent to 51.105, according to data compiled by Bloomberg. Both markets were shut yesterday for holidays, along with Indonesia, the Philippines and Singapore. India was also closed Thursday. The yuan declined 0.1 per cent to 6.3063 in Shanghai, according to the China Foreign Exchange Trade System. “It’s hard to see a trend given that most markets are closed,” said Azmi Shukri Rahman, a foreign-exchange trader at CIMB Investment Bank Bhd. in Kuala Lumpur. “Most people are adjusting their positions ahead of the weekend before the release of US non-farm payrolls data.” Trade figures Minutes from the Fed’s last policy meeting released on April 3 signaled the central bank won’t approve additional stimulus measures unless economic growth shows signs of losing momentum or consumer prices dip below 2 per cent. The Labor Department may report on Saturday that US companies hired 205,000 workers in March, holding above the 200,000 mark for a fourth month, according to the median estimate in a Bloomberg survey. Other data this week showed retail sales in the European Union contracted in February, while factory orders in Germany rose by a fifth of the pace economists had predicted. Spanish Prime Minister Mariano Rajoy said on April 4 that the euro region’s fourth-largest economy is in “extreme difficulty.” Malaysia’s ringgit dropped 0.2 per cent for the week to 3.0643 per dollar. The currency rose 0.2 per cent yesterday ahead of data on April 10 that may show exports increased 8 per cent in February, the most since November, according to the median estimate of economists surveyed.