Asian emerging market currencies rebound against US dollar
Asian currencies from the South Korean won to Malaysian ringgit strengthened against the U.S. dollar Wednesday with confidence returning to trading floors as regional equity markets recovered after a global rout.
But the greenback losses were likely to be short-lived as the U.S. Federal Reserve readies to lift near-zero interest rates for the first time in almost a decade, ana- lysts said.
“It’s hard to see how any Asian currency will post sustained, substantial gains in the fourth quarter, with losses versus the U.S. dollar likely to be the norm,” Sean Callow, a senior currency strategist at Westpac Banking in Sydney, told Bloomberg News.
“We expect volatility to remain elevated as Asian policymakers struggle with regional deceleration in growth, and yet more weeks and months of debate over the Fed policy outlook.”
The won rose almost 1.5 percent against the U.S. dollar and the ringgit was 0.48 percent higher.
The U. S. dollar rose against the yen and euro. The greenback strengthened to 119.99 yen from 119.75 yen Tuesday in New York, while the euro was at US$ 1.1225 from US$ 1.1242 in U. S. trade.
The single currency also eased to 134.70 yen from 134.77 yen.
The Indonesian rupiah gained 0.17 percent, the Singapore dollar rose 0.16 percent, and the Thai baht was up 0.22 percent. The Australian dollar rose 0.12 percent.
Dealers will be keeping an eye on a speech by Fed boss Janet Yellen later in the day for a cue on the bank’s plan for monetary policy, her first since indicating last week that a hike in interest rates remains on the table for 2015.