Emerging market currencies boosted by upbeat mood
Emerging market currencies strengthened against the U.S. dollar Thursday, helped by an upbeat mood across Asian equity markets on speculation of increased monetary stimulus.
But the greenback’s losses were unlikely to hold as sentiment remained dented on worries over a slowdown in China’s economy and concerns over a U.S. Federal Reserve plan to hike near-zero in- terest rates in 2015, analysts said.
The Australian dollar climbed 0.64 percent to 70.63 U.S. cents.
“When risk sentiment improves, the euro falls and the Australian dollar rises — it’s a classic case of risk-based pattern,” Kengo Suzuki, chief currency strategist at Mizuho Securities, told Bloomberg News.
The South Korean won gained 0.76 percent against the U.S. dollar after also rising more than 1 percent on Wednesday. The currency of Asia’s fourth-largest economy has weakened about 10 percent against the greenback from a yearly low in April.
The South Korean central bank has stuck to keeping key interest rates at a record low of 1.5 percent in recent months, following four reductions since August 2014.
Other Asia- Pacific currencies also rose against the U.S. unit: the Indian rupee rose 0.06 percent and the Singapore dollar declined 0.29 percent.
Malaysia’s ringgit was down 0.16 percent, the Indonesian rupiah edged 0.15 percent lower and the Thai baht lost 0.16 percent.
With financial markets in China and Hong Kong closed on Thursday for a public holiday, traders will pay attention to U.S. unemployment figures for September, which Washington will release Friday.