Bloomberg News

Asian Currencies Gain as Bernanke Revives QE3 Prospects

April 10, 2012

India’s rupee led losses in Asian currencies as data showed China’s imports slowed more than economists estimated, dimming the outlook for the region’s exports.

The Bloomberg-JPMorgan Asia Dollar Index (ADXY), which tracks the region’s 10 most-used currencies excluding the yen, fell to this month’s lowest level. Shipments to Asia’s biggest economy rose 5.3 percent in March from a year earlier, figures from China’s customs bureau showed, compared with a 9 percent gain estimated by economists in a Bloomberg survey. The MSCI Asia-Pacific Index (MXAP) of stocks slumped for a fifth day as Japan refrained from expanding monetary stimulus.

“China’s trade figures may have looked positive at a glance, but a deeper analysis led to doubts about economic growth, prompting some investors to buy the dollar,” said Kim Do Hee, a Seoul-based currency trader at Australia & New Zealand Banking Group.

The rupee fell 0.4 percent to 51.33 per dollar as of 3:20 p.m. in Mumbai, according to data compiled by Bloomberg. South Korea’s won lost 0.1 percent to 1,139.70, Malaysia’s ringgit dropped 0.2 percent to 3.0777 and China’s yuan slipped 0.05 percent to 6.3115. Indonesia’s rupiah dropped 0.4 percent to 9,183, after gaining as much as 1.5 percent earlier.

China including Hong Kong is the biggest export market for economies including Malaysia, Taiwan and South Korea. Premier Wen Jiabao cut this year’s growth target to 7.5 percent in March, from an 8 percent goal in place since 2005.

Slowing Demand

“The underlying message is that domestic demand is still slowing” in China, Qu Hongbin, chief China economist at HSBC Holdings Plc in Hong Kong, wrote in a research note today. Growth in the world’s second-largest economy will slow before bottoming out in the second quarter, he wrote.

The U.S. economy is still “far from having fully recovered” from the effects of the global financial crisis, Federal Reserve Chairman Ben S. Bernanke said yesterday. A Labor Department report on April 6 showed hiring by American employers in March amounted to 120,000, trailing the most-pessimistic forecast in a Bloomberg survey.

The ringgit fell, reversing a 0.4 percent advance, before a public holiday tomorrow. Official data showed today exports rose 14.5 percent in February from a year earlier, following a 0.4 percent gain the previous month. Industrial production increased 7.5 percent, compared with 0.3 percent in January.

North Korea

Korea’s won fell to the lowest level since March 26 after an intelligence report showed North Korea may test a nuclear weapon after a planned missile launch between April 12 and 16. Financial markets are closed tomorrow in Seoul for a holiday.

“Concerns over North Korea will prevent the won from strengthening, but with the holiday tomorrow, not many traders will be betting aggressively on a weaker won,” Kim Doo Hyun, a Seoul-based currency dealer at Korea Exchange Bank. (004940)

Elsewhere, the Philippine peso weakened 0.1 percent to 42.84 per dollar as markets opened for the first time since April 4. The Thai baht rose 0.1 percent to 30.93 from its close on April 5. Taiwan’s dollar and Vietnam’s dong were steady at NT$29.57 and 20,833, respectively.

To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net.

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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