BLBG:Asian Currencies Gain, led by Won, as Greek Concerns Ease on Roll-Over
Asian currencies advanced, led by Malaysia’s ringgit and South Korea’s won, on optimism Greece’s creditors will agree to extend its debt maturities.
The MSCI Asia-Pacific Index of regional stocks gained before Greek lawmakers vote tomorrow on budget cuts and asset sales needed to secure future financing. France is working on a plan to roll over 70 percent of Greece’s debt, President Nicolas Sarkozy said yesterday. Taiwan will raise borrowing costs this week and South Korean inflation will accelerate in June, according to economists surveyed by Bloomberg.
“Euro-zone officials will try to ring-fence the Greece problem,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. in Singapore. “If there’s no contagion in the region’s banking system, there’s room for Asian currencies to regain their appreciation path.”
The won rose 0.4 percent to 1,081.15 per dollar as of 11:11 a.m. in Seoul, according to data compiled by Bloomberg. The ringgit strengthened 0.5 percent to 3.0455, the Taiwan dollar advanced 0.4 percent to NT$28.898 and the Philippines peso added 0.1 percent to 43.563.
Greek Prime Minister George Papandreou called on lawmakers yesterday to obey their “patriotic conscience” and back tougher austerity measures. Failure to pass Papandreou’s proposed 78 billion euros ($112 billion) of cuts and asset sales may lead to the euro area’s first sovereign default.
Taiwan Rate Rise
Taiwan will lift its benchmark interest rate by 12.5 basis points to 1.875 percent on June 30, according to all 17 economists surveyed by Bloomberg. South Korean inflation will reach 4.3 percent this month, compared with 4.1 percent in May, according to a Bloomberg poll before data due July 1. Indonesian consumer prices will ease for a fifth month in June, according to a separate Bloomberg survey before a report due July 1.
The won snapped a three-day decline after the nation’s current-account surplus widened to a seven-month high. The surplus was $2.26 billion in May, compared with a revised $1.28 billion in April, the Bank of Korea said today.
“Expectations that Greek creditors are probably headed toward a rollover agreement are boosting stocks and the currency,” said Ha Jun Woo, a currency dealer at Daegu Bank in Seoul. “The current account, which had a surplus, also supports the won.”
Thailand’s baht dropped to its weakest level in more than four months after overseas investors reduced holdings of the nation’s equities ahead of elections slated for July 3. The currency dropped 0.1 percent to 30.92 per dollar.
Thai Election Concern
Global funds sold $980 million more Thai stocks than they bought this month through yesterday, exchange data show, on speculation the poll may spark instability. The Thai vote will pit Prime Minister Abhisit Vejjajiva’s Democrat party against the Pheu Thai party led by Yingluck Shinawatra, sister of fugitive former leader Thaksin Shinawatra.
“The election is a big uncertain factor for Thailand at this moment and investors may want to lighten their positions,” said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo. “The baht may remain under a weakening bias.”
Elsewhere, Indonesia’s rupiah gained 0.1 percent to 8,621 per dollar. Singapore’s dollar appreciated 0.1 percent to S$1.2409 and China’s yuan advanced 0.05 percent to 6.4740.
To contact the reporter on this story: Khalid Qayum in Singapore at kqayum@bloomberg.net David Yong in Singapore at dyong@bloomberg.net.
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
