ASIAN currencies weakened the most in 10 months in July as slowing economic growth and the prospect of higher U.S. interest rates spurred outflows.

    South Korea’s won led declines, falling 4.5 percent in its biggest monthly drop since 2011. Thailand’s baht lost 3.9 percent and Taiwan’s dollar depreciated 1.5 percent. The Bloomberg-JP Morgan Asia Dollar Index, which tracks the region’s 10 major currencies excluding Japan’s yen, fell 1.2 percent.

    Taiwanese gross domestic product increased by the least since 2012 last quarter, a report showed Friday, and expansion in South Korea was the slowest in more than two years. A gauge of Chinese manufacturing fell to a 15-month low in July, fueling concern a slowdown in Asia’s largest economy hasn’t bottomed out yet.

    “There isn’t a single good story coming out of Asia,” said Nizam Idris, head of currency and fixed-income strategy at Macquarie Bank Ltd. in Singapore. “Growth is decelerating, exports are weak and reforms have disappointed. Asia is likely to remain pretty downbeat for some time unless you see a big turnaround in China or improving trade numbers.”

    Foreign funds sold a net US$4.2 billion of South Korean, Taiwanese and Thai shares in July, data compiled by Bloomberg show. Of eight major Asian stock markets, India was the only one that didn’t experience outflows.

    The Federal Open Market Committee said last week that the U.S. job market is solid, dropping the modifier “somewhat,” which boosted bets the United States will start raising interest rates this year. The first 25-basis point increase will probably happen in September, Macquarie’s Idris said.

    China’s yuan fell 0.14 percent in July, heading for its biggest monthly loss since February, after the State Council said last week that the nation will make the currency more flexible. That spurred speculation the trading band might be widened. Authorities have been struggling to cope with an equities rout that saw the Shanghai Composite Index plunge almost 30 percent from a mid-June peak.

    “The stock rout added depreciation pressure on the yuan as it hurts market sentiment and has spillover effects on all asset classes,” said Tommy Xie, an economist at Oversea-Chinese Banking Corp. in Singapore.

    The ringgit fell 1.2 percent last month and reached a 16-year low as a political scandal linked to a probe into the finances of debt-ridden state investment company Malaysia Development Bhd. damaged sentiment toward the country.

    Elsewhere in Asia, Indonesia’s rupiah and the Philippine peso weakened 1.2 percent in July. India’s rupee declined 0.6 percent while Vietnam’s dong was little changed.(SD-Agencies)