Emerging Asian currencies were mixed on Monday on caution before two major central bank meetings, while the International Monetary Fund's decision to double its firepower to battle the European debt crisis provided limited support. Most of region's currencies started the day on a positive note, but failed to hold gains of around 0.1 percent as the IMF's agreement is unlikely to ease immediate concerns over the eurozone.
The Indian rupee and the South Korean won turned lower on importers' dollar demand for payments. Model funds also bought one-month dollar/rupee non-deliverable forwards.
Currency traders shrugged off data showing Chinese factory activity stabilised in April as it did not yet signal an expansion in manufacturing in Asia's biggest economy. "A further expansion of its asset purchase program seems almost in the bag. But a more powerful signal of its commitment to loosen the reins would be purchases further out along the curve," said Frederic Neumann, co-head of Asian economics at HSBC in a research note. Emerging Asian currencies had been major beneficiaries earlier this year when major central banks eased monetary policy to boost growth.
US dollar/Taiwan dollar fell on foreign investor inflows into the country's markets, while the island's importers and oil companies bought the pair, limiting its downside. Dollar/won started the day slightly lower while South Korean exporters sold the pair. But it ended the local session higher as importers dollar demand caused short-covering. US dollar/Singapore dollar eased after data showed the city-state's inflation in March was higher than expected.
Comments
Comments are closed.