In­done­sian ru­piah rises on im­proved ap­petite for risk

The China Post - - BUSINESS INDEX & -

The In­done­sian ru­piah rose Tues­day on re­newed risk ap­petite as spec­u­la­tion strength­ened that the U.S, Fed­eral Re­serve would de­lay rais­ing rates fol­low­ing dis­ap­point­ing U.S. eco­nomic data.

The unit rose 1.8 per­cent to 14,233 per U.S. dol­lar af­ter gain­ing as much as 2.2 per­cent ear­lier.

Ex­pec­ta­tions of con­tin­ued U.S. mon­e­tary eas­ing, at least for now, were seen as bring­ing in­vestors back to se­lected emerg­ing mar­kets.

“Prospects for emerg­ing-mar­ket as­sets are pos­i­tive now. Cur­ren­cies have bot­tomed out and it would be good for eq­ui­ties,” Ang Kok Heng, chief in­vest­ment of­fi­cer at Phillip Cap­i­tal Man­age­ment Bhd., told Bloomberg News.

Against the U.S. dol­lar, the South Korean won firmed 0.52 per­cent from Mon­day af­ter­noon while the Sin­ga­pore dol­lar fell by 0.38 per­cent. The In­dian rupee was nearly flat, while the Thai baht edged down 0.22 per­cent.

The U.S. dol­lar held its ground against ma­jor cur­ren­cies, buy­ing 120.45 yen in Tokyo — lit­tle changed from 120.46 yen in New York overnight.

The euro stood at US$1.1182 and 134.71 yen com­pared with US$1.1187 and 134.77 yen in New York.

Poor U.S. jobs data re­leased on Fri­day has per­suaded many Fed watch­ers that the U.S. cen­tral bank will de­lay a plan to lift in­ter­est rates this year.

The view has im­proved in­vestors’ ap­petite for risk, boost­ing in­ter­na­tional eq­ui­ties and the green­back while keep­ing the yen un­der pres­sure.

“The way the mar­ket is look­ing at the (U.S.) pay­rolls num­bers is weak enough to di­min­ish the case for higher U.S. rates, but not weak enough to point to a ma­te­ri­ally weaker econ­omy,” Adam Cole, Lon­don-based head of global for­eign-ex­change strat­egy at Royal Bank of Canada, told Bloomberg News. “They’re pos­i­tive for risk ap­petite.” While se­lected emerg­ing-mar­ket cur­ren­cies rose, mar­ket op­ti­mism weighed on the yen, seen as a low-yield­ing “safe haven” unit to be fa­vored dur­ing times of fi­nan­cial un­cer­tainty.

The Ja­panese cur­rency was tipped to ease fur­ther on the prospect that the Bank of Ja­pan, which be­gan a two-day meet­ing Tues­day, could of­fer fur­ther eas­ing mea­sures later this year.

“As Fed rate hike ex­pec­ta­tions are pushed back, stocks and com­modi­ties saw a big re­bound and eased risk aver­sion,” Et­suko Ya­mashita, chief economist at Su­mit­omo Mit­sui Bank­ing Corp, told Bloomberg News. That’s lay­ing the ground­work to make it eas­ier for the yen to weaken,” she added.

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