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Most Asian currencies gain as equities shine, yuan bounces

The yuan rose as much as 0.2 per cent, little impacted by the central bank’s weaker fixing of the yuan midpoint. — Reuters picThe yuan rose as much as 0.2 per cent, little impacted by the central bank’s weaker fixing of the yuan midpoint. — Reuters picBENGALURU, Sept 13 — Most emerging Asian currencies brushed off the recent dollar rally and edged higher today as the Chinese yuan rebounded from three straight sessions of losses and Asian shares inched up to a 10-year high.

The yuan rose as much as 0.2 per cent, little impacted by the central bank’s weaker fixing of the yuan midpoint.

The major Wall Street indexes hit record closing highs yesterday which lifted Asian shares to a fresh 10-year peak.

“Asia FX is responding more to capital inflows and positive global sentiment; emerging Asian equities would be a good gauge,” said Emmanuel Ng, FX strategist at Oversea-Chinese Banking Corporation Ltd.

“Some normalcy has returned to the yuan fixings, but yes, the yuan appreciation has provided a positive anchor for Asian FX.” The dollar was up 0.1 per cent against the yen, extending its sharp rally, and at its highest in almost two weeks.

“Improving risk appetite levels and returning portfolio inflows into the emerging markets region are overriding any background dollar resilience,” added Ng.

The won gained as much as 0.3 per cent, while the Singapore dollar was on track to snap three consecutive sessions of losses, up as much as 0.2 per cent. Indonesia’s rupiah, however, slipped 0.1 per cent, and the Philippine peso, resuming trade after markets were shut in the previous session due to floods, also edged down slightly.

Chinese yuan

China’s yuan strengthened slightly today, up 0.1 per cent, set to snap three consecutive days of declines, supported by corporate dollar selling. China’s central bank lowered its official yuan midpoint for a second straight day to 6.5382 per dollar prior to market opening.

“Over the last few weeks, the PBOC (People’s Bank of China) figured it had enough and steered the dollar-yuan higher this week,” said Emmanuel Ng.

 

The central bank, which earlier crushed yuan bears with a range of measures, now now believe the currency’s climb has been too sharp. On Monday, it scrapped two rules intended to strength the yuan. — Reuters

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