BLBG:Won Leads Gains in Asia Currencies on IMF Outlook, Spain Auction
Asian currencies advanced, led by South Korea’s won, after the International Monetary Fund raised its estimate for global economic growth, boosting the outlook for the region’s exports.
The won rose for the first time in three days and the Philippine peso traded at a two-week high. The IMF predicted an expansion of 3.5 percent for this year in its World Economic Outlook published yesterday, up from a January projection of 3.3 percent. The MSCI Asia-Pacific (MXAP) Index of shares gained 1 percent after Spain sold more debt than planned at an auction and a report showed German investor confidence improved.
“Asian currencies got a boost as the pessimistic mood in the market regarding Europe’s situation was corrected a bit,” said Shigehisa Shiroki, chief trader on the Asian and emerging- markets team at Mizuho Corporate Bank Ltd. in Tokyo.
The won strengthened 0.3 percent to 1,137.35 per dollar as of 11:38 a.m. in Seoul, according to data compiled by Bloomberg. The peso and Malaysia’s ringgit rose 0.1 percent to 42.625 and 3.0610, respectively. Taiwan’s dollar was poised for a second day of gain, rising 0.1 percent to NT$29.501.
The IMF forecast yesterday the world economy will grow 4.1 percent in 2013, compared with an earlier estimate of 4 percent.
Spain sold 3.18 billion euros ($4.2 billion) of bonds yesterday, compared with its maximum target of 3 billion euros. Germany’s ZEW Center for European Economic Research in Mannheim said yesterday its index of investor and analyst expectations, which aims to predict economic developments six months in advance, increased to 23.4 from 22.3 in March. That’s the fifth straight gain and the highest reading since June 2010.
Indonesia Debt Sale
Indonesia’s rupiah gained 0.1 percent to 9,177 per dollar after the government raised $2.5 billion selling 10-and 30-year dollar-denominated bonds yesterday. The sale attracted $7.9 billion in bids, the finance ministry said.
The central bank is shifting its policy focus to managing consumer-price gains, Perry Warjiyo, director of economic research and monetary policy, said yesterday.
“Bank Indonesia’s statement will have a positive effect on the rupiah as it reassures foreign investors,” said Klara Pramesti, a treasury analyst at PT Bank Negara Indonesia in Jakarta. “The successful bond auction boosts appetite for riskier local assets.”
China’s yuan declined after the central bank set a weaker reference rate for the currency following data yesterday showing foreign-direct investment contracted for a fifth month.
Yuan Fixing
Investment fell 6.1 percent in March from a year earlier to $11.8 billion, compared with a 0.9 percent decline the previous month, the ministry of commerce reported. The People’s Bank of China set the daily fixing 0.08 percent lower at 6.2948 per dollar even after the International Monetary Fund raised its forecast for global growth and regional equities advanced.
“I’m quite surprised to see a weaker fixing today despite the stronger market across Asia,” said Stella Lee, president of Success Futures & Foreign Exchange Ltd. in Hong Kong. “China may want to show a wider band doesn’t mean more room for one-way appreciation bets. Investors are concerned about the magnitude of China’s economic slowdown as investment keeps falling.”
The yuan dropped 0.08 percent to 6.3064 per dollar in Shanghai, according to China Foreign Exchange Trade System. The central bank fixed the exchange rate 0.08 percent lower at 6.2948. A government report today showed the nation’s home prices fell last month in 37 of 70 cities.
Elsewhere, Thailand’s baht was little changed at 30.80 per dollar and Vietnam’s dong weakened 0.6 percent to 20,845.
To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net; Yumi Teso in Bangkok at yteso1@bloomberg.net.
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
