South Korea’s won and the Philippine peso were among Asian currencies to advance on Friday after the US government stepped up efforts to stem losses in the credit markets, helping revive demand for regional stocks.
Taiwan’s dollar and the Indonesian rupiah also rose as Asian shares climbed from a three-year low following the biggest rally in US equities in six years on Thursday. US Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke sought legislation to remove troubled assets from banks and alleviate a credit squeeze.
“It’s predominantly a confidence issue and what we are seeing is probably a temporary reprieve in the market,” said Wan Murezani Mohamad, a senior analyst at Malaysian Rating Corp in Kuala Lumpur. “There may be value in Asian stocks and currencies” after the recent sell-off, he said.
The won rose 1.2 percent to 1,139.70 against the US dollar as of the 3pm close in Seoul on Friday, according to Seoul Money Brokerage Services Ltd. The won fell 2.7 percent on the week.
The Philippine peso gained 0.9 percent to 46.552 in Manila, Tullett Prebon PLC said. The peso gained 0.7 percent from a week ago.
The won’s advance reduced this year’s loss to 18 percent, the worst among the 10 most-active Asian currencies. The currency will trade between 1,100 and 1,160 in the coming week, according to 10 strategists and traders surveyed by Bloomberg.
Central banks in Japan and Australia pumped US$113 billion into money markets this week, pushing down borrowing costs to revive confidence among banks.
The Philippine peso snapped a seven-week slide as central banks in the world’s biggest economies made US$180 billion available to the global financial system.
India’s rupee climbed from more than a two-year low on speculation stock gains will help stem capital outflows.
Indonesia’s rupiah rose for a fourth day on Friday as Deputy Governor Hartadi Sarwono said Sept. 17 that Bank Indonesia has been intervening to boost the currency.
The rupiah traded at 9,375 in Jakarta, from 9,400 on Thursday, according to data compiled by Bloomberg. The currency rose 0.6 percent this week.
Elsewhere in Asia, the New Taiwan dollar gained 0.2 percent to NTS32.158 against the US currency on Friday. The Singapore dollar fell 0.5 percent to S$1.4362, Malaysia’s ringgit rose 0.5 percent to 3.4527, the Thai baht declined 0.1 percent to 34.17 and Vietnam’s dong dropped 0.5 percent to 16,715.
The US dollar weakened against the euro on Friday after the US authorities pledged to forge a massive financial rescue plan that raised concerns about its cost.
The euro rose to US$1.4476 around 9pm GMT from US$1.4348 late on Thursday in New York.
But the dollar gained ground against the yen, reaching ¥107.38 after ¥105.37 on Thursday.
The US currency earlier in the day jumped on news the US government was hammering out a plan to purchase some of the bad debt that has crippled banks and helped fuel a global financial crisis.
“Forex market conditions have seen a short-term improvement, as a sigh of relief across global financial markets eases tensions and returns much-needed liquidity to traded markets,” said David Rodriguez, analyst at Forex Capital Markets.
The US initiative also ignited major gains in stock markets around the world.
But the dollar’s trajectory later reversed as investors further weighed the implications of the US action, analysts said.
Analysts said the dollar’s appeal hinged on how investors react to such persistent concerns over the health of the US economy and the soundness of the financial sector, and the cost of what it will take to fix the problems.
In late New York trading, the dollar stood at 1.1043 Swiss francs, compared with SF1.1047 late on Thursday. The pound was at US$1.8305, up from US$1.8185.
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