By Kim Kyoungwha and Patricia Lui
March 12 (Bloomberg) -- Indonesia’s rupiah and Singapore’s dollar led Asian currencies higher on speculation improving finances at U.S. banks will bolster demand for emerging-market assets. South Korea’s won slid for the first time in five days as recent gains prompted importers to pay bills.
Seven of Asia’s 10 most-traded currencies excluding the yen strengthened versus the U.S. dollar after JPMorgan Chase & Co. and Citigroup Inc. in the past two days said they were profitable in January and February. The ICE’s Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, declined for a third day.
“We can expect dollar-Asians to trade lower this morning due to better risk appetite,” said Emmanuel Ng, an economist at Oversea-Chinese Banking Corp. in Singapore. “The dollar was weaker against major currencies on improved risk appetite and dollar-Asians will follow.”
The rupiah advanced 0.4 percent to 11,983 per dollar as of 11:04 a.m. in Jakarta, according to data compiled by Bloomberg. The Singapore dollar climbed 0.6 percent to S$1.5292 and Malaysia’s ringgit was up 0.1 percent at 3.6895.
The yen strengthened to 96.30 per dollar in Tokyo from 97.27 late yesterday in New York after a government report showed Japan’s economy shrank less than analysts expected, easing concern the recession will worsen.
The Cabinet Office said gross domestic product shrank an annualized 12.1 percent in the three months ended Dec. 31, less than the 12.7 percent reported last month. The median estimate of economists surveyed by Bloomberg was for a 13.4 percent contraction.
‘Capital Flows’
The rupiah, which has dropped 9 percent versus the dollar so far this year, strengthened this week as global funds bought more Indonesian shares than they sold in the last four trading days. Overseas investors added to their holdings of local- currency government bonds at a March 10 auction of 1.83 trillion rupiah ($153 million) of notes, according to Rully Nova, a currency trader and analyst at PT Bank Himpunan Saudara.
“There are capital inflows to buy government bonds,” said Nova, who is based in Jakarta. “The gains in the rupiah are going to be short-lived. Dollar liquidity is still tight in Indonesia.”
Gains in the Taiwan dollar may be limited amid speculation policy makers will intervene to protect exporters. Central bank Governor Perng Fai-nan said today that order will be maintained in the market when there are trading irregularities. The currency has dropped 7 percent against the U.S. dollar in the past six months, compared with a 25 percent plunge in the won.
Taiwan’s dollar rose 0.1 percent to NT$34.467 versus the greenback today in Taipei, while the won slid 1.2 percent to 1,488.20 in Seoul.
No Rate Cut
The won climbed 6.6 percent against the dollar over the last four trading days, paring this year’s loss to 15 percent, as a rally in global stocks bolstered risk appetite.
The Bank of Korea unexpectedly left its benchmark interest rate at a record-low 2 percent today, following six cuts since early October. Twelve of 15 economists surveyed by Bloomberg News before today’s decision forecast the bank would announce a reduction of at least a quarter of a percentage point to help the economy.
Elsewhere, the Philippine peso rose 0.2 percent to 48.33 per dollar and the Indian rupee added 0.6 percent to 51.5625. India’s financial markets were closed the last two days for public holidays. China’s yuan and the Vietnamese dong were both little changed at 6.8393 and 17,484.5 respectively.
To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net. Bob Chen in Hong Kong at bchen45@bloomberg.net
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