Asian currencies had the best week since September 2012, led by Indonesia’s rupiah and India’s rupee, as signs the U.S. economic recovery is losing pace fueled speculation the Federal Reserve will slow further stimulus cuts.
China’s yuan tumbled by the most on record on speculation the central bank will widen the currency’s trading band, allowing greater volatility at a time when growth is slowing in the world’s second-largest economy.
China’s central bank is forecast to double the yuan’s trading band in the coming quarter as policy makers loosen exchange-rate controls to promote greater usage of the currency in global trade and finance.
International Monetary Fund Managing Director Christine Lagarde backed Group of 20 chair Australia’s proposal to put a number on economic growth targets as the gathering shakes off its crisis-response group origins.
South Korea’s won is leading a drop in Asian currencies this year, after gaining the most in the second half of 2013, as tapering of U.S. stimulus drains funds from emerging-market assets and China’s economy slows.
The People’s Bank of China said the country does not benefit any more from increases in its foreign- currency holdings, adding to signs policy makers will rein in dollar purchases that limit the yuan’s appreciation.
Goldman Sachs Group Inc. recommends selling the South Korean won and the most-accurate forecaster Scotiabank sees possible interest-rate cuts, as exporter earnings are wrecked by currency appreciation.
Thailand’s government is preparing to deploy 20,000 security personnel to counter a plan by protesters to create traffic chaos in central Bangkok in a push to force Prime Minister Yingluck Shinawatra from office.