Bloomberg News

Asian Currencies Extend Rebound, Led by Ringgit, on Europe Talks

May 22, 2012

Asian currencies rose for a second day, led by Malaysia’s ringgit and South Korea’s won, as a global stocks rally and optimism Europe will tackle its debt crisis spurred risk-taking.

The Bloomberg-JPMorgan Asia Dollar Index and the MSCI Asia Pacific Index of shares extended rebounds from five-month lows and the Standard & Poor’s 500 Index had its biggest rally in more than two months in New York yesterday. Germany’s Finance Minister Wolfgang Schaeuble said after a meeting with his French counterpart Pierre Moscovici that the two nations will do “everything necessary” to ensure Greece remains in the euro. European Union leaders meet tomorrow for a summit in Brussels.

“With the French and German leaders’ meeting and expectations ahead of the EU summit, we are seeing some reversal of recent declines in stocks and currencies,” said Byeon Ji Young, a Seoul-based currency analyst at Woori Futures Co.

The ringgit appreciated 0.6 percent to 3.1155 per dollar as of 4:31 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. The won strengthened 0.5 percent to 1,163.40, the Singapore dollar rose 0.4 percent to S$1.2662 and the Philippine peso advanced 0.2 percent to 43.127.

The won rose the most in more than a month as the Kospi index (KOSPI) of Korean shares climbed 1.6 percent, its biggest gain since Jan. 20.

Lingering Uncertainties

“Still, gains in the won may not be big as, with uncertainties lingering in the market, overseas investors are ready to buy the dollar once the won strengthens,” Byeon said.

The ringgit strengthened for a second day ahead of data tomorrow that analysts predict will show Malaysia’s economy expanded for a 10th consecutive quarter. Gross domestic product rose 4.6 percent from a year earlier in the three months through March after gaining 5.2 percent in the previous quarter, according to the median forecast of economists in a Bloomberg survey.

Thailand’s baht appreciated before government data tomorrow that may show exports climbed 6.4 percent in April after falling 6.5 percent in March, a Bloomberg survey showed. The currency rose 0.1 percent to 31.31 per dollar, near a one-week high of 31.18 reached yesterday.

“Sentiment for risky assets is better,” said Norawit Suparinayok, a foreign-exchange trader at Bangkok Bank Pcl. “Good economic data for Thailand is also positive for the baht. We can also expect some baht demand from exporters as the export sector is recovering from last year’s floods.”

Elsewhere, Taiwan’s dollar gained 0.1 percent to NT$29.546 versus the U.S. currency. China’s yuan strengthened 0.08 percent to 6.3231, while Indonesia’s rupiah slid 0.2 percent to 9,268.

To contact the reporters on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net; Jiyeun Lee in Seoul at jlee1029@bloomberg.net.

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


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