BLBG:Asian Currencies Advance on China Plan to Help Resolve Europe Debt Crisis
The Philippine peso and Malaysia’s ringgit led gains in Asian currencies after China said it will help resolve Europe’s debt crisis.
The country with the world’s biggest currency reserves is ready to participate in programs including the European Financial Stability Facility, People’s Bank of China Governor Zhou Xiaochuan said in a speech today, echoing comments made yesterday by Premier Wen Jiabao. The Bloomberg-JPMorgan Asia Dollar Index fell earlier as European leaders canceled a meeting slated for today to discuss a bailout plan for Greece.
The peso appreciated 0.2 percent to 42.675 per dollar as of 11:21 a.m. in Manila, after having declined 0.2 percent earlier, according to data compiled by Bloomberg. The ringgit climbed 0.1 percent to 3.0410 and Taiwan’s dollar strengthened 0.2 percent to NT$29.549. South Korea’s won advanced 0.1 percent to 1,122.85.
“The market always welcomes reassurances about China’s participation in the Europe situation,” said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd. “The immediate concern is still the Greek issue. China’s firepower will be useful at a later stage.”
China had currency reserves of $3.18 trillion at the end of 2011, according to official data. Europe is the Asian nation’s biggest export market, making up about 18 percent of its overseas sales.
European finance ministers will hold a teleconference after canceling a Brussels meeting to prod Greece to do more to clinch 130 billion euros ($171 billion) of aid along with about 100 billion euros of debt relief from private bondholders. Greece needs the aid to make a 14.5 billion-euro bond payment in March.
Fund Inflows
All 10 most-traded currencies in Asia excluding the yen gained this year as global funds bought $14.7 billion more of South Korean, Taiwanese and Indian equities than they sold, according to exchange data. Developing Asia may expand 7.3 percent this year, compared with a 1.8 percent growth in the U.S. and a contraction of 0.5 percent in the euro area, according to estimates released last month by the International Monetary Fund.
The won gained as international investors were net buyers of the nation’s equities for an eighth straight day and the Kospi index of shares rose by the most in a week.
“The won will move within a range until Greek issues are settled,” said Hong Seok Chan, a Seoul-based currency analyst at Daeshin Securities Co. “Exporters selling the dollar to benefit from a weaker won may” provide some support to the local currency, he said.
Malaysia’s Growth
The ringgit fell earlier to this month’s weakest level before data due today that economists predict will show the economy cooled. Gross domestic product rose 4.8 percent in the fourth quarter of 2011 after increasing 5.8 percent in the third, according to the median forecast of economists in a Bloomberg News survey before the government reports the figures at 6 p.m. local time.
“The ringgit is trading on a weaker bias on expectations that the Malaysian economy will slow,” said Azmi Shukri Rahman, a foreign-exchange trader at CIMB Investment Bank Bhd. in Kuala Lumpur. “The currency should trade within a tight range ahead of Greece’s debt ratification.”
Elsewhere, Indonesia’s rupiah and India’s rupee fell 0.2 percent to 9,045 per dollar and 49.28, respectively. The Thai baht declined 0.1 percent to 30.87, while China’s yuan was little changed at 6.3003.
To contact the reporters on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net; David Yong in Singapore at dyong@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
