Asian currencies rose for the third straight week, led by the South Korean won, as foreign investors bought more assets in the region as fears that U.S. interest rates would be hiked soon dissipated.
Minutes of U.S. Federal Reserve’s meeting in March showed that the interest rates won’t be increased soon as the economy is yet to recover sufficiently.
Foreign investors purchased a net of US$1.9 billion Indian, South Korean and Taiwanese stocks last week, according to the Taipei Times. In Taiwan alone, the figure was US$716 million worth of stocks. So far, foreign funds have acquired US$4.52 billion worth of local shares in Taiwan this year.
The Bloomberg-JPMorgan Asia Dollar, which monitors Asia’s 10 major currencies except the yen, rose 0.3 percent last week to 115.78 in Hong Kong trade.
“The weaker US dollar has boosted Asian currencies,” said Eddie Cheung, a currency strategist at Standard Chartered PLC in Hong Kong. “Equity flows into Taiwan have been consistently large and while offshore investors weren’t that deterred by the protests, the fact that they ended confirmed investors’ optimism that there would be a resolution.”
The New Taiwan dollar gained its strongest in a week in nine months last week after it surged 0.8 percent to trade at NT$30.132 versus the greenback, up from NT$30.380 on April 3.
The Indonesian rupiah fell 0.9 percent to 11,414 a dollar, its steepest margin in a week this year after unofficial poll results showed that Jakarta Governor Joko Widodo garnered fewer votes than predicted, setting the stage for a runoff.
The South Korea won gained 1.8 percent to trade at 1,035.35 per U.S. dollar, while the Philippine peso rose 1.5 percent to 44.29 against the greenback and the Malaysian ringgit gained 1.4 percent to 3.2362 versus the dollar. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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