BLBG:Asian Currencies Advance, led by Won, as Greek Vote Boosts Risk Appetite
Asian currencies gained for a second day, led by South Korea’s won, as signs economic growth is on track and optimism Greece will avoid a default boosted demand for the region’s assets.
The MSCI Asia-Pacific Index of regional stocks advanced after Greek Prime Minister George Papandreou won a parliamentary confidence vote, bolstering his chances of pushing through austerity measures to secure further financial aid. Overseas investors bought $225 million more Taiwanese, Indonesian and Thai equities than they sold yesterday, exchange data showed.
“Given the passage of the confidence vote, all risky assets including Asian currencies are being supported,” said Frances Cheung, a senior strategist at Credit Agricole CIB in Hong Kong. “Asia continues to be an outperformer in terms of growth and so, whenever sentiment returns, regional currencies will be supported.”
The won strengthened 0.3 percent to 1,075.55 per dollar as of 11:29 a.m. in Seoul, according to data compiled by Bloomberg. The Taiwan dollar gained 0.2 percent to NT$28.881, the Philippine peso advanced 0.2 percent to 43.387 and Thailand’s baht rose 0.1 percent to 30.47.
Greece needs to pass the austerity package to ensure it receives a 12 billion-euro ($17.2 billion) payment in July, part of last year’s 110 billion-euro bailout from the European Union and the International Monetary Fund. Reports due today will show a falling jobless rate in Taiwan and accelerating inflation in Malaysia, according to economists surveyed by Bloomberg.
Strong Regional Data
Taiwan’s dollar strengthened for a second day before data that economists predict will show unemployment dropped to 4.3 percent in May, the least since September 2008.
Malaysia’s ringgit gained to its strongest level in a week before a government report today that economists forecast will show inflation quickened, stoking speculation of an increase in borrowing costs. The currency rose 0.1 percent to 3.0303 per dollar.
Consumer prices gained 3.3 percent in May from a year earlier, the most since March 2009, according to the median estimate of economists surveyed by Bloomberg. The central bank next meets on July 7 to review its policy rate.
“Expectation of a higher inflation rate also supports the Malaysian currency’s strength,” said Yeo Chin Tiong, head of financial markets at Alliance Bank Bhd. in Kuala Lumpur.
The baht advanced for a second day after data this week showed exports increased more than economists forecast in May, adding to signs economic growth is on track.
Positive Sentiment
Thai exports, which account for about two-thirds of the economy, increased 17.6 percent in May from a year earlier, more than the 15.6 percent gain that economists surveyed by Bloomberg had forecast, a government report showed on June 20.
“Concern over Greece has eased a bit today, which supports sentiment for stocks and regional currencies,” said Hideki Hayashi, a global economist at Mizuho Securities Co. in Tokyo. “With today’s sentiment, better-than-expected economic data is supportive for the baht.”
Elsewhere, Indonesia’s rupiah strengthened 0.1 percent to 8,596 per dollar. Singapore’s dollar added 0.1 percent to S$1.2336 and China’s yuan was little changed at 6.4653 per dollar.
To contact the reporter on this story: Khalid Qayum in Singapore at kqayum@bloomberg.net Yumi Teso in Bangkok at yteso1@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
