Malaysia’s ringgit and South Korea’s won advanced for a second day after Premier Wen Jiabao said the momentum for a recovery in China isn’t yet in place and the government needs to assess and recognize the problems, Xinhua News Agency reported yesterday. Asian stocks rose before Federal Reserve Chairman Ben S. Bernanke presents his semi-annual report on the U.S. economic outlook to Congress this week.
“There is some speculation that a high level meeting among policy makers in China will lead to additional supportive measures,” said Sacha Tihanyi, a senior currency strategist at Scotiabank in Hong Kong, a unit of the Bank of Nova Scotia.
The ringgit strengthened 0.2 percent to 3.1790 per dollar as of 10:02 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The won gained 0.2 percent to 1,147.85, Taiwan’s dollar climbed 0.1 percent to NT$29.983 and the Philippine peso rose 0.2 percent to 41.903.
China’s gross domestic product increased 7.6 percent in the second quarter from a year earlier, the slowest pace in more than three years, the government reported July 13. The nation needs to expand consumption and restructure the economy, Vice Premier Li Keqiang said during a tour in central Hubei province, Xinhua reported the next day.
‘Safeguard Growth’
The world’s second-largest economy, including Hong Kong, is the biggest export market for countries including South Korea, Taiwan and Malaysia. The MSCI Asia Pacific Index (MXAP) of stocks climbed 0.3 percent, following a 1.7 percent rally in the S&P 500 Index of U.S. equities on July 13.
“The won will be supported by U.S. stock gains and expectations for China’s stimulus, but the impact will be limited with global slowdown concerns lingering,” said Cho Young Bok, a Seoul-based currency dealer at Daegu Bank.
Thailand’s baht touched a one-week high after overseas funds bought $65 million more local equities than they sold last week, taking net purchases this month to $118 million, exchange data show. The currency erased its gain to be steady at 31.65 per dollar.
China’s yuan strengthened 0.04 percent to 6.3764 against the greenback in Shanghai, halting a three-day slide, according to the China Foreign Exchange Trade System. The central bank set its daily fixing rate at 6.3208 versus 6.3247 on July 13.
“China has to act as quickly as possible to safeguard growth,” said Banny Lam, Hong Kong-based chief economist at CCB International Securities Ltd., a unit of China’s second-largest bank. “The hopes of more stimulus measures are supporting the yuan today.”
Elsewhere, Indonesia’s rupiah dropped 0.4 percent to 9,481 per dollar and the Vietnamese dong was unchanged at 20,865.
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