SINGAPORE, Sept 19: Emerging Asian currencies rallied with most Southeast Asian units up around 2 percent on Thursday after the U.S. Federal Reserve surprised investors by postponing the start of reductions to its stimulus programme.
The Fed said it wanted to wait for more evidence of solid growth in the world’s top economy and Chairman Ben Bernanke refused to commit to reducing bond purchases this year, stressing that the programme was ‘not on a preset course.’
‘Asian currencies should stage a strong comeback,’ said Frances Cheung, senior strategist at Credit Agricole CIB in Hong Kong.
‘From the perspectives of correlations with U.S. Treasury yields and the fact that some had suffered due to their economies’ external deficits, the Indian rupee and the Indonesian rupiah should benefit the most with the delayed tapering,’ Cheung said.
The Indonesian rupiah enjoyed bond inflows, traders said. The Thai baht leaped as government bond yields plunged.
The Malaysian ringgit jumped on short-covering and as traders expect further demand from real-money funds.
The Philippine peso gained as Manila stocks advanced nearly 4 percent.
The South Korean won rose in offshore forwards markets with local financial markets closed for holidays. Its one-month non-deliverable forwards to the dollar were quoted at 1,072.5 versus around 1,083 on Wednesday afternoon.
Regional stocks rallied broadly while U.S. Bond yields and the dollar dropped.
Most emerging Asian currencies have fallen so far this year as the Fed was expected to scale back its $85 billion monthly bond-buying programme. That caused capital outflows from the region, especially Southeast Asia.
The rupiah and the rupee led the regional depreciation as India and Indonesia were seen more vulnerable to a potential Fed policy shift because of the countries’ current account deficits.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0200 GMT
Currency Latest bid Previous day Pct Move
Japan yen 98.12 97.96 -0.16
Sing dlr 1.2429 1.2460 +0.25
*Taiwan dlr 29.722 29.752 +0.10
*Korean won 1081.40 1084.10 +0.25
Baht 31.08 31.68 +1.91
Peso 43.11 43.53 +0.99
Rupiah 11275.00 11460.00 +1.64
Rupee 63.38 63.38 +0.00
Ringgit 3.1645 3.2340 +2.20
*Yuan 6.1212 6.1215 +0.00
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 98.12 86.79 -11.55
Sing dlr 1.2429 1.2219 -1.69
Taiwan dlr 29.722 29.136 -1.97
Korean won 1081.40 1070.60 -1.00
Baht 31.08 30.61 -1.51
Peso 43.11 41.05 -4.77
Rupiah 11275.00 9630.00 -14.59
Rupee 63.38 54.99 -13.24
Ringgit 3.1645 3.0580 -3.37
Yuan 6.1212 6.2303 +1.78
* Financial markets in China, South Korea and Taiwan are closed for holidays.
(agencies)
Follow our WhatsApp channel