BLBG:Some Asian Currencies Rise, Led by Korean Won, on German Data
Some Asian currencies rose, led by South Korea’s won, after better-than-estimated German factory data tempered concern that Europe’s debt crisis will worsen.
Germany, the euro region’s biggest economy, reported yesterday that factory orders jumped 2.2 percent from a month earlier in March, more than 0.6 percent in February and the median estimate in a Bloomberg survey for 0.5 percent. Markets fell across Asia yesterday as election results in France and Greece put at risk austerity measures targeted at cutting budget deficits. Official data late yesterday showed Taiwan’s exports dropped by the most in three months.
“The German data helped sentiment,” said Singapore-based Jonathan Cavenagh, a currency strategist at Westpac Banking Corp. “Generally, we still see a weaker trend for Asian currencies as the focus remains on the European situation. The Taiwan export data was disappointing and is symptomatic of renewed concerns surrounding the Asian growth outlook.”
The won advanced 0.3 percent to 1,135.68 per dollar at the close in Seoul, according to data compiled by Bloomberg. The Philippine peso climbed 0.2 percent to 42.272. Taiwan’s dollar closed little changed at NT$29.370, while Malaysia’s ringgit fell 0.1 percent to 3.0570.
Taking a Breather
French president-elect Francois Hollande is calling for austerity measures to be delayed. The Greek government, which took office after last weekend’s elections, has 30 days to decide whether to make a 20 billion yen ($250 million) interest payment due today on 4.5 percent notes maturing in 2016, or default. Greek political leaders will meet for a second day today in a bid to form a government.
“The currency market is taking a breather after the recent decline, but gains will be limited with lingering uncertainties in Europe,” said Byeon Ji Young, a Seoul-based currency analyst at Woori Futures Inc. “Investors will refrain from betting strongly on a position with no major economic data due in the next couple of days.”
Taiwan’s dollar halted a four-day decline on speculation the central bank will tolerate faster gains to stem inflation, even after exports declined. Overseas shipments fell 6.4 percent in April from a year earlier, compared with a 3.2 percent decline in March, as Europe’s debt crisis and slower Chinese growth crimped demand for its electronics products.
‘Fight’ Inflation
Consumer prices on the island increased 1.44 percent last month from a year earlier, following a revised 1.25 percent advance in March, statistics bureau data showed yesterday.
“The central bank may allow gains in the Taiwan dollar to fight imported inflation,” said Eric Hsing, a fixed-income trader at First Securities Inc. in Taipei. “People will prefer safer assets like government bonds if they see more uncertainties in Europe.”
China’s yuan was little changed at 6.3080 per dollar in Shanghai, from 6.3079 yesterday, according to the China Foreign Exchange Trade System. The People’s Bank of China set its daily fixing 0.09 percent stronger at 6.2804, strengthening it for the first time in four days. The currency is allowed to trade up to 1 percent on either side of the reference rate.
Excessive adjustment of the yuan’s exchange rate could hurt the economy, Yi Gang, head of the currency regulator, said in remarks published yesterday. Yi reiterated the yuan is no longer “obviously undervalued” and is near an “equilibrium level.”
“There’s more room for yuan appreciation if Europe’s economy improves, which would help Chinese exports,” said Edmond Law, deputy head of foreign exchange at BWC Capital Markets in Hong Kong.
Elsewhere, Thailand’s baht was little changed at 31 per dollar, from 30.96 on May 4. Markets were closed there for a holiday yesterday. Indonesia’s rupiah declined 0.6 percent to 9,246.
To contact the reporters on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net.
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
