Asian currencies rallied after Chinese Premier Wen Jiabao
said there’s room to adjust monetary policy in the world’s second-largest
economy, improving the region’s export outlook.
The Bloomberg-JPMorgan Asia Dollar Index snapped a four-day loss after state
radio quoted Wen as saying yesterday that slowing inflation creates more room to
adjust policies. China is the biggest export market for Thailand, Taiwan and South
Korea and the second-largest for Malaysia. The Korean jobless rate fell to 3.1 percent
in July, the lowest level this year, official data showed today, while Malaysia
reported yesterday that growth unexpectedly accelerated in the second quarter.
“Monetary easing in China to spur growth is positive for Asia as it improves
the export environment,” said Yuji
Kameoka, chief currency strategist at Daiwa Securities Co. in Tokyo.
Taiwan’s dollar strengthened 0.1 percent to $NT29.974 as of 10:34 a.m. in
Taipei, according to data compiled by Bloomberg. Malaysia’s ringgit gained 0.1
percent to 3.1318 and the Philippine peso rose 0.1 percent to 42.25. The Asia
Dollar Index, which tracks the region’s 10 most active currencies excluding the
yen, advanced 0.04 percent after losing 0.4 percent in the previous four days.
Malaysia, Thailand GDP
The ringgit rebounded from its lowest level in more than a week after central
bank data yesterday showed gross domestic product increased
5.4 percent in the three months through June from a year earlier, beating all 23
estimates in a Bloomberg survey of economists. The median forecast was for
growth to slow to 4.6 percent from 4.9 percent in the first quarter.
Expansion for the full year may be at the upper end of the projected 4
percent-to-5 percent range even as risks from Europe and the U.S. remain, Bank
Negara Malaysia said.
“Demand for the ringgit is on the uptake because of the strong second-quarter
GDP,” said Yeo Chin Tiong, head of financial markets at Alliance Bank Bhd. in Kuala
Lumpur. “In the near term, the Malaysian currency should trade in a tight
range in the absence of positive news.”
Thailand’s baht was little changed, after sliding the most in four weeks
yesterday, ahead of data that is forecast to show a pickup in growth. The
economy expanded 3 percent in the second quarter, compared with a 0.3 percent
gain in the previous three months, according to the median estimate in a
Bloomberg survey before an official report due Aug. 20. The currency traded at
31.54 per dollar.
“Solid economic data should help attract some fund inflows, especially as
risk sentiment has been improving globally,” Daiwa Securities’ Kameoka said.
Weaker Yuan Fixing
China’s yuan
dropped the most in almost two weeks as the central bank weakened the daily
fixing to the lowest level since November. the exchange
rate. The currency dropped 0.07 percent to 6.3669 per dollar in Shanghai.
Premier Wen said there’s “growing room for monetary-policy operations,” during a
two- day visit to the eastern province of Zhejiang.
“China will keep the yuan weaker to alleviate pressure on exporters,” said Daniel
Chan, executive vice president at Glory Sky Global Markets Ltd. in Hong Kong.
“There’s no surprise in what Wen said. More aggressive easing is just a matter
of timing and investors are waiting for genuine actions.”
Elsewhere, Indonesia’s rupiah were little changed at 9,511 per dollar. South
Korea’s won weakened 0.3 percent to 1,132.65 from Aug. 14. Korean financial
markets were closed yesterday for a holiday. Vietnam’s dong strengthened 0.1
percent to 20,850.
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