China factory survey lifts won, Taiwan dollar; SE Asia FX falls: SINGAPORE, Sept 23 — The South Korean won and the Taiwan dollar hit multi-month highs today, helped by more signs of China’s economic turnaround, while most emerging Asian currencies slid on renewed worries that the Federal Reserve will cut its monetary stimulus. Growth in China’s factory sector accelerated to a six-month high in September, a preliminary survey showed, as stronger domestic and foreign demand added to recent signs of a tentative turnaround in the world’s second-largest economy. The won touched a near eight-month peak on sustained stock inflows. The Taiwan dollar advanced to its strongest in more than four months on demand from foreign financial institutions and exporters. The Northeast Asian units found further support from catch-up plays as their financial markets were closed late last week when the Fed surprised global investors by standing pat, which boosted regional peers. In contrast, most Southeast Asian currencies fell today after a top Fed official suggested there is a chance of tapering next month, although those units pared some losses after the encouraging China survey. “It reflects a theme of mild outperformance in new industrialised economies’ currencies, not just catch-up plays even as we see cautious environment following the Fed non-taper move last week,” said Saktiandi Supaat, head of FX research for Maybank in Singapore, referring to Singapore, South Korea and Taiwan. “They will keep outperforming on better fundamentals, correlation and more direct links with developed markets’ recovery as long as the uncertainty of a taper or an eventual taper does not derail the US or developed market recovery,” he added. The won and the Taiwan dollar have weathered concerns over the Fed’s policy shift better than Southeast Asian peers as their high-tech exports have benefited from a global recovery. Won The won advanced 0.8 per cent to 1,075.0 per dollar as foreign investors extended a buying spree to a 19th session in Seoul’s main stock exchange. Still, South Korea’s foreign exchange authorities were spotted intervening to stem its upside, traders said. Such official dollar purchases prevented exporters from chasing the won for month-end settlements, they added. “Everybody is cautious over the authorities here. China PMI added support, but the won is likely to stay around the current levels,” a foreign bank trader in Seoul, referring to the flash HSBC Purchasing Managers’ Index. China is South Korea’s top export market. Taiwan dollar The Taiwan dollar rose as much as 0.8 per cent to 29.505 to the US dollar, its strongest since May 10, on inflows from foreign financial institutions and exporters’ demand. But its upside was limited in thin trade as the central bank was spotted buying small amounts of US dollars around 29.520, traders said. Local importers also purchased the greenback for payments, while some foreign institutions joined them, according to traders. Rupiah The rupiah lost ground on increasing dollar demand from local companies for month-end payments. The forwards market pointed to further depreciation with one-month non-deliverable forwards to the dollar weakening to 11,310. The central bank was spotted providing dollar liquidity around the session low of 11,470 per dollar, traders said. “BI wants to maintain that level first,” said a Jakarta-based trader, referring to Bank Indonesia. “But the rupiah will weaken more this week as dollar demand is intensifying,” he added. — Reuters dlvr.it/41JF3r
Posted on: Mon, 23 Sep 2013 05:32:24 +0000
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