Indonesian rupiah leads rally; yuan fixing helps
Bareksa • 13 Mar 2014
A businessman looks at a screen displaying a photo of 100 dollar bank notes, in Tokyo (REUTERS)
Asian currencies firmed on Thursday against the dollar, most recovering from the previous day's losses
Reuters - Asian currencies firmed on Thursday against the dollar, most recovering from the previous day's losses, supported by a stronger Chinese yuan, a rally in regional stock markets and a broad improvement in risk-appetites among investors.
A flat close on Wall Street and stability in the price of copper and other commodities that had been spooked by fears of a slowdown and default in China seemed to drive the rally in Asian stocks and currencies, although some traders said it was merely a bout of short-covering in markets.
"Risk sentiment changed overnight but it's really just positioning that's driving the markets," said one trader in Singapore.
Chinese data on retail sales, industrial output and fixed asset investment released on Thursday meanwhile provided a fresh excuse for the market to be wary of embracing too much risk. The data was weaker than expected.
Earlier in the day, China's central bank set a slightly stronger midpoint fixing for the yuan for the first time in four days, signalling it intends to keep the currency stable and giving the spot yuan a boost.
Indonesia's rupiah was at the fore of Thursday's rally, rising nearly half a percent against the dollar ahead of a policy meeting at which Bank Indonesia was expected to once again keep rates on hold.
This would be the fourth consecutive meeting at which BI will be holding its reference rate steady at 7.50 percent. It raised the rate 175 basis points between June and November last year.
The rupiah has risen nearly 8 percent from its lows in December, and yield-seeking foreign money has been flocking to Indonesian equities and bonds, supported by the quick turnaround from last year's crisis and the improvement in the country's current account.
"Real money still likes to own rupiah assets," a rupiah non-deliverable forward trader in Singapore said, explaining the sustained rally in the currency.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0602 GMT
Change on the day at 0602 GMT
Currency Latest bid Previous day Pct Move
Japan yen 102.66 102.75 +0.09
Sing dlr 1.2662 1.2662 +0.00
Taiwan dlr 30.321 30.375 +0.18
Korean won 1068.90 1070.20 +0.12
Baht 32.35 32.45 +0.31
Peso 44.53 44.65 +0.27
Rupiah 11368.00 11420.00 +0.46
Rupee 60.98 61.22 +0.39
Ringgit 3.2800 3.2870 +0.21
Yuan 6.1394 6.1450 +0.09
Change so far in 2014
Currency Latest bid End prev year Pct Move
Japan yen 102.66 105.28 +2.55
Sing dlr 1.2662 1.2632 -0.24
Taiwan dlr 30.321 29.950 -1.22
Korean won 1068.90 1055.40 -1.26
Baht 32.35 32.86 +1.58
Peso 44.53 44.40 -0.30
Rupiah 11368.00 12160.00 +6.97
Rupee 60.98 61.80 +1.35
Ringgit 3.2800 3.2755 -0.14
Yuan 6.1394 6.0539 -1.39