Asian currencies headed for a third weekly decline, led by the Thai baht and Malaysia’s ringgit, amid concern a slowdown in China and U.S. stimulus cuts will deepen the selloff in emerging markets.
The Bloomberg JPMorgan-Asia Dollar Index (ADXY) fell 0.1 percent this week as a report signaled China’s manufacturing contracted for the first time in six months. The Federal Reserve said Jan. 29 it will pare its monthly bond purchases by $10 billion to $65 billion from February, following a similar reduction in January. The baht was poised for its worst week in almost a month after global funds pulled money from the nation’s assets amid concern a Feb. 2 election will trigger more violence.
“China has a big impact on the risk of emerging markets,” said Thomas Harr, Singapore-based head of local market strategy at Standard Chartered Plc. “That is weighing on Asia combined, with other concerns about tapering and political uncertainty in emerging markets.”
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