BLBG:Asian Currencies Extend Gains As Stocks Rise On Fed Speculation
Asian currencies gained as regional stocks rose on speculation Federal Reserve Chairman Ben S. Bernanke will today hint at further efforts to boost the U.S. economy, such as a third round of quantitative easing.
Malaysia’s ringgit rose the most this month and South Korea’s won traded near a one-week high as bets for global stimulus mounted a day after the International Monetary Fund cut its 2013 world economic growth forecast to 3.9 percent from an April estimate of 4.1 percent. U.S. retail sales fell for a third month, dropping 0.5 percent in June from a year earlier. China’s State Council may this week give details of easing measures to support growth, Nomura Holdings Inc. said yesterday.
“The weak U.S. retail sales have spurred hopes of quantitative easing,” said Kenix Lai, a currency analyst at Bank of East Asia Ltd. in Hong Kong. “Investors are also betting China will announce more stimulus measures and economic growth could regain momentum in the second half.”
The ringgit rallied 0.5 percent to 3.1650 per dollar as of 10:23 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The won climbed 0.4 percent to 1,142.81, the Philippine peso rose 0.3 percent to 41.74 and China’s yuan gained 0.07 percent to 6.3745. Thailand’s baht gained 0.1 percent to 31.57 per dollar.
The Bloomberg-JPMorgan Asia Dollar Index (MXAP) rose for a third day, while its 60-day historical volatility was little changed at 3.72 percent. The Dollar Index fell 0.2 percent on concern that more money-printing for bond purchases would weaken the greenback. The MSCI Asia Pacific Index of stocks climbed 0.6 percent.
IMF Cut
The IMF cut its 2013 global growth forecast yesterday as Europe’s debt crisis slows expansion in emerging markets from China to India.
“Markets are getting a bit ahead of themselves and are pushing into a higher chance of QE3 sooner rather than later,” said Vishnu Varathan, a Singapore-based economist at Mizuho Corporate Bank Ltd. Investors “are looking for real returns elsewhere” as the greenback weakened, he said.
Fed Chairman Bernanke will address the outlook for the economy when he delivers his semi-annual monetary policy report to Congress later today.
China’s central bank set its daily fixing rate at 6.3167 yuan per dollar versus 6.3208 yesterday. China Securities Journal reported yesterday that a State Council meeting as early as July 18 may be followed by policy measures, citing unidentified analysts.
Elsewhere, Indonesia’s rupiah dropped 0.3 percent to 9,474 per dollar, Taiwan’s dollar advanced 0.2 percent to NT$29.957 and the Vietnamese dong rose 0.1 percent to 20,850.
To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.
