Asian currencies weakened, led by South Korea’s won, on concern policy makers will intervene to counter appreciation that may hurt exports.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-used currencies excluding the yen, extended yesterday’s retreat from a two-year high and was 0.2 percent lower as of 11:23 a.m. in Hong Kong. The won dropped 1.1 percent to 1,134.89 per dollar, Malaysia’s ringgit slid 0.4 percent to 3.1065 and the Thai baht slid 0.1 percent to 30.22. The two Southeast Asian currencies touched 13-year highs this week.
“Concern grew in the market about intervention and this also triggered some profit-taking,” said Hideki Hayashi, a global economist at Mizuho Securities Co. in Tokyo. “Funds are still flowing into developing Asia, whose economies are in better condition than the U.S. and Japan. The basic trend remains for regional currencies to rise and moves such as today’s are likely to prove temporary.”
The Asia Dollar Index jumped 2.6 percent in September, the most since March 2009, as stock markets in India, South Korea and Taiwan attracted some $13 billion from abroad. Foreigners pumped $1 billion more into Korean equities in the first two trading days of October and today bought more of the securities than they sold for a 15th day.
Korea Audits
South Korea’s government said today that banks involved in foreign-exchange transactions will face audits, having yesterday issued a report saying it will “try to keep the currency from moving sharply due to herd behavior.” Thai Prime Minister Abhisit Vejjajiva said yesterday policy makers are working to curb any “excess volatility” in the baht and Finance Minister Korn Chatikavanij said Sept. 17 that rising currency reserves showed the central bank had bought dollars.
Thailand’s reserves climbed 2.5 percent in the week ended Sept. 24 to $163.1 billion, the biggest gain since December 2008, official figures show. South Korea’s reserves rose to a record $289.8 billion in September, when the won jumped 5.1 percent, according to central bank data released yesterday.
Bank Negara Malaysia said on Aug. 24 that it “will be there” when there are excessive and sudden moves in the foreign- exchange market, while Bank Indonesia Governor Darmin Nasution said Sept. 17 any purchases of the U.S. currency would aim to “prevent the rupiah’s fluctuations from becoming too big.” Philippine Finance Secretary Cesar Purisima said Sept. 28 the central bank intervenes “when there are unusual fluctuations.”
Indonesia’s rupiah fell 0.1 percent to 8,948 per dollar today, trimming this year’s advance to 4.9 percent. The Philippine peso declined 0.2 percent to 43.84, after yesterday touching a two-year high of 43.66.
Taiwan Intervention
Taiwan’s dollar advanced for a fifth day, climbing 0.3 percent to NT$31.146 versus the greenback, before a government report this week that may show exports increased for an 11th straight month in September.
It strengthened yesterday beyond NT$31 for the first time since August 2008, before erasing most of its gains in late trading because of suspected intervention. The central bank may have sold NT$20 billion ($643 million) or more to curb the currency’s rise, the Economic Daily News reported today, without saying where it got the information.
Elsewhere, the Singapore dollar slid 0.2 percent to S$1.3176. China’s financial markets were closed for a holiday.
To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.
http://jodnet.blogspot.com
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-used currencies excluding the yen, extended yesterday’s retreat from a two-year high and was 0.2 percent lower as of 11:23 a.m. in Hong Kong. The won dropped 1.1 percent to 1,134.89 per dollar, Malaysia’s ringgit slid 0.4 percent to 3.1065 and the Thai baht slid 0.1 percent to 30.22. The two Southeast Asian currencies touched 13-year highs this week.
“Concern grew in the market about intervention and this also triggered some profit-taking,” said Hideki Hayashi, a global economist at Mizuho Securities Co. in Tokyo. “Funds are still flowing into developing Asia, whose economies are in better condition than the U.S. and Japan. The basic trend remains for regional currencies to rise and moves such as today’s are likely to prove temporary.”
The Asia Dollar Index jumped 2.6 percent in September, the most since March 2009, as stock markets in India, South Korea and Taiwan attracted some $13 billion from abroad. Foreigners pumped $1 billion more into Korean equities in the first two trading days of October and today bought more of the securities than they sold for a 15th day.
Korea Audits
South Korea’s government said today that banks involved in foreign-exchange transactions will face audits, having yesterday issued a report saying it will “try to keep the currency from moving sharply due to herd behavior.” Thai Prime Minister Abhisit Vejjajiva said yesterday policy makers are working to curb any “excess volatility” in the baht and Finance Minister Korn Chatikavanij said Sept. 17 that rising currency reserves showed the central bank had bought dollars.
Thailand’s reserves climbed 2.5 percent in the week ended Sept. 24 to $163.1 billion, the biggest gain since December 2008, official figures show. South Korea’s reserves rose to a record $289.8 billion in September, when the won jumped 5.1 percent, according to central bank data released yesterday.
Bank Negara Malaysia said on Aug. 24 that it “will be there” when there are excessive and sudden moves in the foreign- exchange market, while Bank Indonesia Governor Darmin Nasution said Sept. 17 any purchases of the U.S. currency would aim to “prevent the rupiah’s fluctuations from becoming too big.” Philippine Finance Secretary Cesar Purisima said Sept. 28 the central bank intervenes “when there are unusual fluctuations.”
Indonesia’s rupiah fell 0.1 percent to 8,948 per dollar today, trimming this year’s advance to 4.9 percent. The Philippine peso declined 0.2 percent to 43.84, after yesterday touching a two-year high of 43.66.
Taiwan Intervention
Taiwan’s dollar advanced for a fifth day, climbing 0.3 percent to NT$31.146 versus the greenback, before a government report this week that may show exports increased for an 11th straight month in September.
It strengthened yesterday beyond NT$31 for the first time since August 2008, before erasing most of its gains in late trading because of suspected intervention. The central bank may have sold NT$20 billion ($643 million) or more to curb the currency’s rise, the Economic Daily News reported today, without saying where it got the information.
Elsewhere, the Singapore dollar slid 0.2 percent to S$1.3176. China’s financial markets were closed for a holiday.
To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.
http://jodnet.blogspot.com
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