BLBG:Won Leads Advance in Asian Currencies, Driven by European Debt Optimism
Asian currencies strengthened, led by South Korea’s won and Taiwan’s dollar, as European leaders stepped up efforts to tackle their debt crisis, bolstering demand for emerging-market assets.
The Bloomberg-JPMorgan Asia Dollar Index (ADXY) snapped a four-day decline after German Chancellor Angela Merkel and French President Nicolas Sarkozy met yesterday to flesh out a blueprint on budgetary discipline. Merkel said it may be ready by Jan. 30, one month ahead of schedule. The MSCI Asia-Pacific Index (MXAP) of shares rose for a second day.
“Sentiment remains positive, which underpins Asian currencies in general,” said Nizam Idris, a currency strategist at Macquarie Group Ltd. in Singapore.
The won strengthened 0.6 percent to 1,156.69 per dollar in Seoul, after losing 1.3 percent in the past three days, according to data compiled by Bloomberg. Taiwan’s dollar gained 0.5 percent to NT$30.051 and Malaysia’s ringgit advanced 0.3 percent to 3.1435.
The won rose the most in almost three weeks after South Korean Finance Minister Bahk Jae Wan said yesterday foreign central banks are showing growing appetite for the nation’s debt and the government will work with them to limit volatility in cross-border capital flows, Yonhap Infomax reported.
“Today’s gains in the won can be seen as a reaction to declines in the past three days,” said Yun Se Min, a Seoul- based currency dealer with Busan Bank. “The finance minister’s comments yesterday increased awareness about government intervention to stem currency volatility.”
‘Positive Sentiment’
The ringgit strengthened by the most in a week even as a government report showed today that Malaysia’s factory output rose the least in four months in November. Taiwan’s dollar rallied as traders shrugged off official data yesterday that showed the island’s exports increased 0.6 percent in December from a year earlier, the least since 2009.
“The export numbers were bad, but the positive sentiment across Asian markets today overrode that,” said James Wang, a fixed-income trader at Yuanta Securities Co. in Taipei. “Market moves are going to be limited before the presidential election” on Jan. 14, he said.
China’s economy won’t have a hard landing this year, and housing prices are unlikely to collapse, said Yu Yongding, a former central bank adviser, at a forum in New York yesterday. The People’s Bank of China set the currency’s fixing 0.1 percent stronger at 6.3171 per dollar. The yuan was little changed at 6.3145.
Elsewhere, Thailand’s baht advanced 0.1 percent to 31.73 per dollar, according to data compiled by Bloomberg. The Philippine peso gained 0.3 percent to 43.98, while Indonesia’s rupiah fell 0.5 percent to 9,198.
To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
