US dollar declines on upbeat trade data in Indonesia, strong export in Malaysia
Waning expectations of an early rise in U.S. interest rates helped higher- yielding currencies advance against the U.S. dollar again Wednesday.
The Indonesian rupiah and the Malaysian ringgit led gains on upbeat Indonesian trade data and strong Malaysian export figures for August.
Meanwhile the yen rose for the second straight day against the U.S. dollar after the Bank of Japan (BOJ) decided against increasing its already huge stimulus measures.
The data from the two Southeast Asian nations contributed to a generally confident outlook despite ongoing worries about China, the world’s number two economy and biggest energy user.
Anxiety has pushed investors out of higher-yielding but higher-risk emerging market currencies since mainland China devalued the yuan in August.
That move triggered a sweeping selloff that wiped trillions in valuations from global markets. “The rupiah was sold off quite sharply before sentiment turned, so the adjustment may be also quite large,” Koji Fukaya, the Tokyo-based chief executive officer at FPG Securities, told Bloomberg News.
“Sentiment is turning better in emerging markets” and the rupiah could strengthen to 13,700 over the next three weeks, he said.
In Malaysia, the ringgit surged the most since 1998 after monthly exports jumped more than forecast in August.
In Asia-Pacific currency trade, the U.S. dollar declined to 120.00 yen on Wednesday afternoon in Tokyo after the BOJ decided to hold fire on fresh stimulus measures despite sluggish growth and stagnant prices, and Japanese stocks extended gains to a sixth session.
The U.S. unit was down from 120.28 yen before the BOJ decision Wednesday and from 120.21 yen in New York Tuesday.
The rupiah surged 3.43 percent against the greenback and the ringgit gained 3.07 percent.
The Thai baht was 0.88 percent higher, the Singapore dollar rose 0.26 percent, the Korean won advanced 0.37 percent and the Australian dollar edged up 0.34 percent.