Korea’s Won Leads Asia Currency Gains as Losses Judged Excessive
South Korea’s won and Taiwan’s dollar led gains among Asian currencies as some investors judged recent declines excessive.
The won rose from near an eight-month low and Taiwan’s dollar climbed from a four-month low. The MSCI (MXAP) Asia-Pacific Index of shares snapped a four-day losing streak after Canadian Finance Minister Jim Flaherty said policy makers from the Group of Seven countries will hold a call today to discuss the European debt crisis.
“Amid no fresh bad news and a rebound in stocks, we are seeing a correction upward in regional currencies that have been weakening recently,” said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo. “Still, sentiment toward emerging-market assets isn’t so strong yet.”
The won advanced 0.2 percent to 1,180.20 per dollar in Seoul, according to data compiled by Bloomberg. The Taiwan dollar added 0.2 percent to NT$30, while the baht climbed 0.9 percent from June 1 to 31.63 after onshore markets were shut yesterday for a holiday.
The won tumbled 4.3 percent last month, the biggest decline since September, and touched 1,185.53 on May 25, the weakest level since October, as Europe’s worsening debt crisis and China’s slowing economy deterred risk-taking.
‘Absence of Bad News’
“The absence of any major bad news from Europe was a positive for Asia,” said Kim Sung Soon, a currency dealer at state-run Industrial Bank of Korea. (024110) “With stocks rebounding, there are some players snapping up bargains after a recent decline in the local currency and the market seems to be full of dollars for now.”
Malaysia’s ringgit was little changed as economists predicted official data tomorrow will show Malaysian exports rebounded. The currency traded at 3.2005 per dollar, compared with 3.1972 yesterday.
Overseas shipments rose 1.1 percent in April from a year earlier after contracting 0.1 percent in March, according to the median forecast of 13 economists surveyed by Bloomberg News.
“Malaysian exports may pick up and that will support the ringgit,” said Akira Banno, a treasury adviser at Bank of Tokyo-Mitsubishi UFJ Bhd. in Kuala Lumpur. “There is an expectation that the G7 teleconference may come to some solution on Europe.”
The baht touched a two-week high on speculation exporters converted overseas income and as a technical indicator heralded a decline in the dollar. The U.S. currency’s 14-day relative strength index against the baht surged to 76 on June 1, above the 70 threshold that indicates the greenback is overbought.
“It’s natural to expect some exporter flows after the long weekend,” Dai-ichi Life Research’s Nishihama said.
Elsewhere, China’s yuan was little changed at 6.3675 against the greenback, while India’s rupee declined 0.4 percent to 55.86. Indonesia’s rupiah fell 0.1 percent to 9,403. The Philippine peso traded at 43.465 from 43.483 yesterday.
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