BLBG:Asia Currencies Gain This Week, Led by Won, on Joint Central Bank Action
Asian currencies completed their first weekly advance since October after joint efforts by monetary authorities to tackle Europe’s debt crisis bolstered sentiment toward higher-yielding assets.
The Bloomberg-JPMorgan Asia Dollar Index reached the highest level in more than two weeks yesterday after six central banks led by the Federal Reserve agreed on Nov. 30 to reduce emergency borrowing costs for dollars. The yuan gained for a second day yesterday after the People’s Bank of China cut lenders’ reserve-requirement ratios for the first time since 2008.
The won strengthened 2.9 percent this week to 1,131.30 per dollar, according to data compiled by Bloomberg. Malaysia’s ringgit climbed 2.6 percent to 3.1205, while Thailand’s baht and India’s rupee jumped 2 percent to 30.80 and 51.2063, respectively. Global funds bought $2.4 billion more South Korean, Taiwanese and Thai equities than they sold this week, exchange data show.
“Market players have welcomed moves by the central banks, which is improving sentiment,” said Kozo Hasegawa, a trader at Sumitomo Mitsui Banking Corp. in Bangkok. “We are seeing some fund inflows into the region, supporting the currencies.”
The premium banks pay to borrow dollars overnight from central banks will fall by half a percentage point to 50 basis points, the Fed said. The Fed coordinated the move with the European Central Bank and monetary authorities in Canada, Switzerland, Japan and the U.K.
Boosting Growth
The won posted its first weekly gain since October after euro-area finance ministers agreed to expand the capacity of a regional bailout fund on Nov. 29. The same day, South Korea reported its biggest current-account surplus in a year.
“Global coordinated actions, combined with favorable economic data, triggered some risk-taking this week,” said Byeon Ji Young, a currency analyst at Woori Futures Co. in Seoul.
The baht had its biggest weekly advance since July after the Thai central bank signaled it will boost economic growth by easing monetary policy as needed. The Bank of Thailand cut its benchmark one-day bond repurchase rate by 25 basis points to 3.25 percent on Nov. 30.
China’s yuan strengthened 0.24 percent this week to 6.3597 per dollar, according to the China Foreign Exchange Trade System. The People’s Bank of China raised its daily reference rate by 0.07 percent to 6.3310 per dollar yesterday, the strongest level since Nov. 14.
Elsewhere, the Philippine peso appreciated 1.5 percent this week to 43.27 per dollar, Taiwan’s dollar advanced 1 percent to NT$30.16 and Indonesia’s rupiah was unchanged at 9,055.
To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
