Asian Currencies Fall Led by Won, Rupiah as U.S. Slowdown Eases

June 8 (Bloomberg) -- South Korea’s won and the Indonesian rupiah led declines among Asian currencies as signs a U.S. recession is easing helped strengthen the dollar, damping demand for riskier emerging-market assets.

ICE’s Dollar Index, which tracks the greenback against six major currencies, rose on June 5 by the most since January after a government report showed the U.S. lost fewer jobs than economists had forecast in May. Taiwan’s dollar weakened for a fourth day on speculation officials will cap appreciation to bolster exports before data today that may show overseas sales shrank for a ninth month.

“The global strength of the dollar is the key driving force,” said Seoul-based Ko Yun Jin, a currency dealer with Kookmin Bank. “Traders feel comfortable with pushing the dollar higher but will have to keep a tab on the performance of exporters and foreign investors.”

The won fell 0.7 percent to 1,252.20 per dollar as of 12:10 p.m. in Seoul, according to data compiled by Bloomberg. The currency reached 1,225.97 on May 11, the highest level since October. The rupiah dropped 0.6 percent to 9,993 and the Taiwan dollar lost 0.3 percent to NT$32.831.

Malaysia’s ringgit weakened for a fifth day before a government report on June 10 that may show factory output slumped for an eighth month in April. The currency declined 0.5 percent to 3.5125 per dollar.

Malaysia Production

Industrial production fell 13 percent from a year earlier after dropping 14 percent in March, according to the median estimate of economists surveyed by Bloomberg News. The nation’s exports tumbled 26 percent in April, the trade ministry reported on June 4.

The dollar traded near the strongest level in a month against the yen on speculation a U.S. recession is easing. The greenback traded at 98.44 yen from 98.64 on June 5 in New York, when it climbed to 98.89, the highest level since May 8.

The Asian financial crisis and the bursting of the Internet bubble in 2000 “warned us against underestimating the dollar finding a floor,” DBS Group Holdings Inc. said in a research report published today.

A U.S. Commerce Department report on June 11 will show consumers increased spending in May. Retail sales climbed 0.5 percent after two months of declines, according to economists in a Bloomberg survey. U.S. payrolls fell by 345,000 in May, the smallest decrease in eight months, after a revised 504,000 loss in April, the Labor Department said on June 5.

Jobs Data

“The strong job data was hard to ignore in terms of the impact on the greenback,” said Suresh Kumar Ramanathan, a currency strategist at CIMB Investment Bank Bhd. in Kuala Lumpur. “There’s some covering of short-dollar positions.” A short position is a bet that a currency will decline.

Taiwan’s dollar weakened before a 4 p.m. report that will show overseas sales declined 34 percent in May from a year earlier, compared with a 34 percent drop the previous month and a 36 percent loss in March, according to a separate Bloomberg survey.

The currency has “maintained dynamic stability” with official action only taken when changes are “excessive,” Perng Fai-nan, the island’s central bank governor, said yesterday. Exchange rates must be flexible to prevent the currency from being attacked by speculators, Perng said.

Elsewhere, Thailand’s baht fell 0.4 percent to 34.33 per dollar. China’s yuan traded little changed at 6.8356 and the Philippine peso declined 0.5 percent to 47.470.