BLBG:Asian Currencies Gain, Led by Won, After Global Funds Raise Share Holdings
Asian currencies strengthened, led by South Korea’s won, after global funds added to holdings of regional assets on optimism policy makers will take steps to boost economic growth.
International investors bought $152 million more shares than they sold in Indonesia, Thailand and the Philippines this week through yesterday, according to exchange data. The Philippine peso rose to the highest level in more than two months after policy makers cut borrowing costs last week, and the Thai baht advanced before the central bank reviews its benchmark interest rate today.
“Action by the central banks is a sign that they are going to do something to stimulate the economy,” said Amonthep Chawla, a market analyst at Kasikornbank Pcl in Bangkok. “That gives some boost to investors.”
South Korea’s won appreciated 0.3 percent to 1,125.28 per dollar as of 11:18 a.m. in Seoul and the baht gained 0.1 percent to 31.45, according to data compiled by Bloomberg. The peso climbed 0.2 percent to 43.095, according to Tullett Prebon Plc. Financial markets in China, Hong Kong and Taiwan are closed for a public holiday.
The MSCI Asia-Pacific Index of stocks rose to the highest level since October before the Federal Open Market Committee releases forecasts today for benchmark U.S. interest rates for the first time. The world’s largest economy expanded an annualized 3 percent in the three months through December from a year earlier after growing 1.8 percent in the previous quarter, according to the median forecast of economists in a Bloomberg News survey before Commerce Department data due on Jan. 27.
Growth Forecast
The won rose to the strongest level since Dec. 7 on speculation exporters are converting their foreign exchange to meet month-end cash demand. The South Korean economy expanded 3.5 percent in the three months ended December from a year earlier, matching the pace in the preceding three months, according to the median forecast of economists in a Bloomberg survey before official data due tomorrow.
“The market is expecting to receive a flurry of exporter settlements as the month-end nears,” said Hwang Sun Min, a Seoul-based currency dealer at Kookmin Bank. “The won seems to be able to sustain its upward momentum as offshore players favor the local currency over the dollar for now ahead of the Federal Reserve’s meeting.”
The baht approached a three-week high on optimism the Thai economy will rebound from the worst floods in more than 70 years that shut factories and disrupted manufacturing last year. The Bank of Thailand is predicting growth of 4.8 percent this year, compared with a forecast 1.8 percent expansion in 2011.
The central bank will cut its one-day repurchase rate to 3 percent from 3.25 percent at 2:30 p.m. local time today, according to all 15 economists surveyed by Bloomberg.
The ringgit advanced 0.5 percent from Jan. 20 to 3.0890 per dollar. Malaysia’s financial markets were closed in the first two days of this week for the Lunar New Year. Elsewhere, the Indonesian rupiah dropped 0.1 percent to 8,998, a second day of losses.
To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net.
To contact the editor responsible for this story: Ven Ram at at vram1@bloomberg.net
