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EM ASIA FX-Ringgit leads Asia FX gains as oil extends bounce

* Malaysia Q4 GDP growth beats f’cast; c/a surplus jump

* Rupiah gains; Indonesia c.bank seen cutting interest rate

* Won ends local trade weaker as offshore funds sell for

hedge

(Adds text, updates prices)

By Jongwoo Cheon

SINGAPORE, Feb 18 (Reuters) – The Malaysian ringgit advanced

more than 1 percent on Thursday, leading gains among emerging

Asian currencies, as a surge in oil prices and

better-than-expected fourth-quarter data eased concerns about

Southeast Asia’s third-largest economy.

Regional currencies also found support as Federal Reserve

policymakers indicated slower U.S. interest rate hikes.

Malaysia’s economy grew 4.5 percent in the fourth quarter

from a year earlier, slowing from the third quarter but beating

market expectations. Its current account surplus in the

October-December period more than doubled from the previous

three months.

After the data, the ringgit rose as much as 1.6

percent to 4.1500 per dollar.

“The economic data supported the ringgit for now, but I

doubt oil price rallies are sustainable,” said Qi Gao, an

emerging Asian currency strategist for Scotiabank in Hong Kong.

Gao recommended a cautious approach on the ringgit, saying

the currency is seen moving between 4.1000-4.3000. It has a

chart resistance at a 200-day moving average at 4.1059.

The ringgit closely tracks crude prices as Malaysia is a

major supplier of palm oil and liquefied natural gas.

Crude futures rose in Asian trade after Iran welcomed plans

by Russia and Saudi Arabia to cap production, while analysts

said the move would not lead to any output cuts and Tehran

offered no action of its own.

In addition to higher oil prices, emerging Asian currencies

rose on speculation that the Fed is stepping further away from

plans to raise interest rates several times this year.

St. Louis Fed President James Bullard, one of the U.S.

central bank’s most prominent advocates of higher borrowing

costs, declared it “unwise” to move any further in light of weak

inflation and global volatility.

Minutes of the January Fed’s meeting released on Wednesday

showed that policymakers worried about tighter global financial

conditions hitting the U.S. economy and considered changing

their planned path of policy tightening in 2016.

Still, some analysts warned against too much optimism toward

Asian currencies.

“We are in for a period of range trading for most Asian

currencies. If the U.S. data continues to improve, market will

start to price Fed rate hikes back in, which will see renewed

dollar strength, weighing on Asian currencies again,” said Khoon

Goh, senior FX strategist for ANZ in Singapore.

“The oil bounce is positive for risk sentiment, and if that

leads to some calm in markets, then that certainly brings Fed

rate hikes back on the table.”

RUPIAH

Indonesia’s rupiah gained, tracking broad strength

in regional currency.

The official Jakarta Interbank Spot Dollar Rate,

which the central bank introduced in 2013 to manage exchange

rate fluctuations, was fixed at 13,479, stronger than the

previous 13,479.

The rupiah pared some of earlier gains ahead of Bank

Indonesia’s policy decision later in the day. The central bank

is expected to cut its benchmark interest rate for the second

time this year to support growth in Southeast Asia’s largest

economy.

WON

South Korea’s won started the day firmer on

improving risk appetite, but failed to hang on to the gains and

ended the local session weaker as offshore funds dumped it for

currency hedging.

“Amid aggressive hedge among real money names, some offshore

funds such as macro accounts reacted to the won’s weakness,”

said a foreign bank trader in Seoul.

“Short-term speculators could join the move,” the trader

added.

The foreign exchange authorities continued to warn of

intervention.

Finance Minister Yoo Il-ho said recent movements in the

dollar-won exchange rate warrant close observation by the

government and officials are ready to step in if movements

become too exaggerated.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0600 GMT

Currency Latest bid Previous day Pct Move

Japan yen 113.87 114.10 +0.20

Sing dlr 1.4025 1.4031 +0.04

Taiwan dlr 33.266 33.505 +0.72

Korean won 1226.34 1227.10 +0.06

Baht 35.55 35.61 +0.17

Peso 47.55 47.67 +0.26

Rupiah 13457.00 13505.00 +0.36

Rupee 68.48 68.47 -0.01

Ringgit 4.1615 4.2170 +1.33

Yuan 6.5174 6.5290 +0.18

Change so far in 2016

Currency Latest bid End prev year Pct Move

Japan yen 113.87 120.30 +5.65

Sing dlr 1.4025 1.4177 +1.08

Taiwan dlr 33.266 33.066 -0.60

Korean won 1226.34 1172.50 -4.39

Baht 35.55 36.00 +1.27

Peso 47.55 47.06 -1.02

Rupiah 13457.00 13785.00 +2.44

Rupee 68.48 66.15 -3.40

Ringgit 4.1615 4.2935 +3.17

Yuan 6.5174 6.4936 -0.37

(Additional reporting by Yena Park in SEOUL; Editing by Kim

Coghill)

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