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.
Canada’s dollar erased a gain against its U.S. counterpart after a drop in crude oil prices increased speculation demand will wane for currencies of nations that are dependent on commodities for growth.
Canada’s dollar declined for the first time in three days after Federal Reserve Chairman Ben S. Bernanke said the economic outlook in the U.S., the nation’s largest trading partner, is “unusually uncertain.”
The gap in Canadian and U.S. benchmark interest rates is at a 15-year high based on the Taylor rule formula for determining optimal rates, signaling borrowing costs are poised to rise further in Canada.