Currency News: Asia Pacific Currencies Fall
Currency News
Several currencies in the Asia Pacific region hit multiyear lows on Friday as Beijing sent signals that could slow growth in the region. In a move to support the country’s trade sector, China’s State Council announced policies that could allow its currency to trade in a wider range. The prospect of a weaker Chinese currency threatens the struggling economies in the region because China’s goods would become more competitive.
The Chinese government would allow the currency to trade in a wider range to address concerns over sluggish demand domestically and abroad. An early gauge of China’s factory activity showed levels falling to a 15-month low. The news sent Asian currencies stumbling after they were already under pressure from a potential interest rate hike in the US. Regional currencies are falling against the US dollar during a period of divergence, as the US is tightening currency while China and others are tightening theirs.
This has caused many currencies in the area to fall against the dollar last week. The Australian dollar fell to its lowest level against the US dollar in six years, and Indonesia’s rupiah dropped to its lowest level in nearly two decades. South Korea’s won and Thailand’s baht both reached their lowest levels since 2009, and India’s rupee and the Philippine Peso were also trading down after resisting advances by the broadly stronger dollar so far this year.
