Sun, Oct 16, 2011 - Page 10 News List

Asian currencies gain on emerging-market demand

Bloomberg

Asian currencies had a second weekly gain, led by South Korea’s won, on optimism European leaders would act to stem the debt crisis, spurring investors to buy emerging-market assets.

Foreign funds bought US$1.7 billion more stocks than they sold this week through Friday in Taiwan, South Korea and Thailand. Finance ministers and central bankers from the G20 will conclude talks in Paris, after people familiar with the matter said on Friday that eurozone governments were revamping their strategy to combat the debt turmoil.

“Foreign investors were buying Asian stocks as concern over the European debt crisis eased a bit for now,” said Kozo Hasegawa, a trader at Sumitomo Mitsui Banking Corp in Bangkok. “However, the problem is not fundamentally solved and those external factors will influence the markets for the time being.”

The won strengthened 1.9 percent this week to 1,156.13 per US dollar. The New Taiwan dollar rallied 0.6 percent to NT$30.300, while Malaysia’s ringgit advanced 0.9 percent to 3.1302.

The Bloomberg-JPMorgan Asia Dollar Index rose 0.7 percent this week.

Asian currencies will extend their slide in the third quarter in the three months through December before rebounding early next year as export demand picks up, said Standard Chartered PLC, the most accurate forecaster for the region.

The won, Asia’s worst performer last quarter, will drop 1.8 percent per US dollar during the current three-month period and climb 7.1 percent in the first quarter of next year, Standard Chartered said.

The ringgit completed a second weekly gain after Malaysian Prime Minister Najib Razak forecast economic growth would quicken next year.

Elsewhere, Thailand’s baht gained 0.5 percent this week to 30.78 per US dollar, the Philippine peso rose 0.4 percent to 43.375, while Indonesia’s rupiah climbed 0.6 percent to 8,848. The yuan advanced 0.12 percent to 6.3785.

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