Sun, Jun 30, 2013 - Page 15 News List

Asian ex-Japan currencies rise as QE worry wanes

Bloomberg and CNA, with staff writer

Asian currencies advanced, snapping a two-week slump, on speculation the US Federal Reserve would hold off from paring asset purchases after US first-quarter growth trailed an earlier estimate.

The world’s largest economy expanded 1.8 percent in the first three months, less than a prior assessment of 2.4 percent, official data showed on Wednesday. Fed Bank of New York president William Dudley said on Thursday the monthly debt-buying program, which has boosted dollar supply, could be prolonged should growth miss forecasts.

The New Taiwan dollar rose 0.5 percent this week to NT$30.12 against the US dollar, as local exporters rushed to convert their earnings to file quarter-end results, dealers said on Friday

The strength of the South Korean won and the Chinese yuan also led traders to raise their NT dollar holdings, they said.

A strong rebound of the local bourse further boosted demand for the local currency, but the greenback’s slide was limited by further intervention by the local central bank, which was reluctant to see a quick appreciation of the New Taiwan dollar, they added.

India’s rupee rebounded from a record low of 60.7650 per US dollar reached on Wednesday, while Vietnam devalued its currency for the first time since 2011.

Vietnam’s central bank devalued the dong and cut the interest-rate cap on US dollar deposits to help “improve” the balance of payments and boost forex reserves.

The State Bank of Vietnam weakened its reference rate for the currency by 1 percent to 21,036 dong per US dollar, effective yesterday, according to a statement released on Thursday.

The Bloomberg-JPMorgan Asia Dollar Index of 10 regional currencies rose 0.4 percent this week to 115.79. The Philippine peso rose 1.2 percent since June 21 to 43.205 per US dollar, the best weekly gain in a year, according to data compiled by Bloomberg.

Malaysia’s ringgit jumped 1.2 percent to 3.1648 and the South Korean won climbed 1.1 percent 1,142.06.

Elsewhere in Asia, Thailand’s baht rose 0.4 percent from a week earlier to 31 per US dollar, while Indonesia’s rupiah climbed 0.1 percent to 9,925. Singapore’s dollar rose 0.5 percent to S$1.2655 per US dollar.

Meanwhile, the US dollar rallied against the majority of its most-traded counterparts. The yen fell to the weakest level versus the US dollar since June 6, and 10-year Treasury yields rose as Fed officials sought to clarify policy on providing stimulus to the world’s biggest economy. The euro reversed gains and the IMF said the currency made up the smallest share of allocated central-bank reserves since 2004.

The US dollar rose 0.8 percent to ¥99.14 at 5pm in New York. It added 0.2 percent US$1.3010 per euro. Japan’s currency weakened 0.6 percent to 128.97 per euro.

The Bloomberg US Dollar Index, which tracks the dollar against 10 major currencies weighted by liquidity and trade flows, gained 0.3 percent to 1,040.48, reaching the highest level on a closing basis since May 28.

The British pound dropped for a second week against the US dollar as Bank of England Governor Mervyn King said the economy was “too weak to be satisfactory,” underpinning bets the central bank would keep monetary policy loose.

The pound fell 1.5 percent this week to US$1.5187 as of 5:19pm in London on Friday after sliding to US$1.5166, the lowest since May 31. It slid 0.6 percent to £0.8561 per euro, the biggest weekly loss since the period ended May 24.

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