World Business
Emerging market currencies firm up against dollar, yen
By Shiyin Chen and Saeromi Shin (China Daily)
Updated: 2010-06-29 10:29
 |
Large Medium Small |
SINGAPORE - The won and ringgit strengthened against the dollar and the yen, and concerns about defaults diminished after leaders from the Group of 20 nations endorsed targets to slash budget deficits once the world's economic recoveries are cemented.
The won gained 1.1 percent to 1,201.89 per dollar in evening trade in Tokyo, rising for the first time in five days, and Malaysia's ringgit climbed 0.8 percent. The cost of protecting Asia-Pacific corporate and government bonds from non-payment fell the most since June 21. The MSCI Asia Pacific Index swung between gains and losses. The Stoxx Europe 600 gained 0.4 percent to 249.26. Futures on the Standard & Poor's 500 Index rose 0.2 percent. Dubai's DFM General Index was little changed.
The G20 pledged to maintain existing stimulus plans and take "concerted actions" to sustain the global recovery, then aim to reduce deficits by 2013. G20 leaders also said the recovery, while faster than expected, is "uneven and fragile" and called for banks to raise more capital to avoid a repeat of the global financial crisis.
"Investors seem to be weighing uncertainties over the global economic outlook in the latter half," said Hyun Dong-sik, a fund manager at Korea Investment Trust Management Co in Seoul, which manages $15 billion. "I don't think we will have a double dip, but the pace of recovery seen in the past year will inevitably slow down as stimulus measures fizzle out."
Yen action
The yen was at 89.42 per dollar from 89.23 last week, when it strengthened to 89.22, the highest since May 21, while the dollar slipped to 1.0928 Swiss francs from 1.0929, after earlier weakening to 1.0897, the lowest since May 4.
Yuan forwards strengthened 0.1 percent to 6.67 per dollar, extending last week's again, after US President Barack Obama said that his government expects the yuan to go up "significantly". The president also said the G20's goal to cut deficits reflects US targets and takes into account the fiscal and economic needs of each nation.
"The G20 statement has Europe's desire for deficit cuts and the United States' desire for maintenance of economic stimulus, which satisfies both of them," said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co Ltd in Tokyo.
Equity movers
About the same number of stocks rose and fell on the MSCI regional index. Mizuho Financial Group Inc led Japanese banks lower, losing 2.6 percent after saying it plans to sell new shares. Seoul Broadcasting System, which has the World Cup broadcasting rights in South Korea, dropped 1.4 percent after the nation's soccer team failed to advance to the quarterfinals.
Indian Oil Corp, the nation's biggest state-owned refiner, soared 5.8 percent, adding to an 11 percent surge on June 25 after India said it will scrap price controls on gasoline and diesel after more than seven years. Bharat Petroleum Corp gained 2.7 percent and Hindustan Petroleum Corp surged 6.9 percent. The Sensex climbed 0.6 percent, the first increase in three days.
Bloomberg News