Riffrag Business & Finance Report

Asian currencies rose, led by the South Korean won and Malaysian ringgit prompted speculation the Federal Reserve will keep interest rates low to stimulate demand for high-yield assets in emerging markets.

The strengthening of the won and the ringgit occur every day throughout the week. The appreciation continued as the impact of the Fed’s decision Open Market Committee last month that was launched yesterday, to extend the stimulus package to sustain economic recovery. Export performance of Taiwan and Malaysia is estimated to rise for the month of both.

“Expectations that the U.S. appears to raise rates, but invites a lot of arguments, as they are not solid recovery. Action to sell U.S. dollars occurs in response to the news and would encourage regional currencies,” said Zaki Mokhtar, head of foreign exchange spot trading on the RHB Bank Bhd Kuala Lumpur.

Won rose 0.3% to 1133 at 12:30 pm in Seoul, which had touched the highest level in 15 months of 1129.42.

Malaysian ringgit reached the highest position in 6 weeks at 3.3620, and rose 0.2% continues to 3.3710 per U.S. dollar. Philippine peso also gained 0.3% to 45.895 Taiwan dollars and increased 0.1% to NT $ 31,833.

John Lipsky senior International Monetary Fund (IMF) said the institution is likely to raise 2010 global growth estimate later this month, from 3.1% position.

The median estimate of economists surveyed showed exports to Taiwan in December jumped 45% from the previous year and Malaysia rose 3% for 3 months.

South Korean Won continues to strengthen for the fifth day, the longest movement in almost 4 months, along with the improvement in export performance which triggered the entry of foreign investors borong local shares.

Samsung Electronics Co., the largest semiconductor manufacturers in Asia, as well as flat screens and mobile phones, recording Fourth quarter earnings of about 3.7 trillion won (U.S. $ 3.3 billion). In fact, the same period last year, the company still suffered losses.

“South Korean Won support payments from the state improved. Despite the strengthening occurred in March 2009, but we believe it is fundamentally the won is still undervalued,” said Leong Wai Ho, an economist at Barclays Plc in Singapore.

The Bank of Korea said the interest rate policy will support economic growth even as the central bank should maintain the imbalance caused by low interest rates. According to the 14 economists surveyed, Governor Lee Seong Tae believed to hold interest rates at 7 days 7% tomorrow.

Philippine peso rose to the highest position in 16 months at 45.72 per dollar two days ago, due to speculation the U.S. dollar bond sale by the government worth U.S. $ 1.5 billion. This action sparked buying of the local currency.

“We go back to see the strengthening of the peso,” said Antonio Espedido, treasurer at China Banking Corp. in Manila.

Indonesia plans to sell bonds worth U.S. $ 4 billion, and Vietnam is looking for funds amounting to U.S. $ 1 billion.

Rupiah strengthened 0.1% to 9230 per dollar today, after yesterday rose to 1.4%. Thai Baht is also strong 0.1% to 33.14 yuan and China are not much changed at 6.8277

The analyst believes the foreign exchange market this year a lot of good momentum for the rupiah if they see the improvement in global conditions could push the rupiah strengthened to Rp9.000 range Rp8.000 per U.S. dollar.

“Today, the rupiah had strengthened to below the level of Rp9.000 per U.S. dollar. And it could move further strengthened if they see a lot of good momentum into the future. Global conditions improved while the U.S. dollar was depressed by unemployment situation in the country,” said the dealer currency in one of the state-owned banks, today.

According to him, the problem is somewhat worrying for the development of related rupiah Bank Century settlement of the case. “We do not know the direction where this case. If the ends are political and suddenly the finance minister was replaced, yes of course it will influence the market. However, so far we do not know him anywhere,” he explained.

Another factor that could push the rupiah could come from rising oil prices and other commodities in the world. Oil prices today reached U.S. $ 83 per barrel to show the potential increase in the next few weeks.

“If oil and commodity prices continue to rise, it will impact on the measures taken by the government related to fuel prices. If you ride, its effect can be the price of LPG, which pushed inflation at the end.”

In addition, the impact of the implementation of the Asean free trade-China Free Trade Agreement (ACFTA) to the industrial sector should also be observed. According to him, actually ACFTA implementation of the government is betting on the economy. The problem, if not in full support by the government, for example by the imposition of certain tariffs, it will weaken the economy.

“The government must not rashly and domestic products will be fully supported. Government can not escape the hand,” he explained.

On the other hand, a positive signal for the rupiah, also visible from the emission of government bonds amounting to U.S. $ 4 billion this afternoon.

Analysts had estimated at least 2011 or 2012, Indonesia back into the category of investment grade as in 1996. “At that time [1996], Indonesia has a BBB rating, but lowered the monetary crisis. Next year’s rate could rise to the re-investment grade category,” he said.

euro traded near its lowest level in 2 months for the U.S. dollar ahead of a report on the industrial sector, production is expected to fall.

The yen weakened against 13 of the 16 currencies after the quarterly Tankan index of the Bank of Japan to increase in numbers since most economic kecik out reseri.

Australian dollar and New Zealand is predicted to weaken for a second day due to speculation the Federal Reserve raised its benchmark interest rate next year.

“The movement of the euro depends on the economic data coming out this week. Even so, the euro remains captive to the risk of falls,” said Toshiya Yamauchi, manager of foreign exchange trading Ueda Harlow Ltd. in Tokyo.

The euro was at U.S. $ 1.4622 at 8:58 a.m. in Tokyo, rose from U.S. $ 1.4615 on December 11 when touching U.S. $ 1.4586, the weakest level since October 5. The dollar traded at 89.27 yen from 89.10. Euro bought at 130.54 yen from 130.24.

Australia’s currency traded at U.S. $ 0.9105 weakening of the U.S. $ 0.9127 cents and New Zealand dollar was at U.S. $ 0.7242.

The survey showed production in 16 countries that use the euro fell 0.7% in October, turning from rising 0.3% last month. EU statistics office in Luxembourg will launch the data today.

International Monetary Fund, Vietnam needed to assess the balance of payments and increase confidence in the dong currency to strengthen the economic growth of at least 6% this year.

Vietnam economic growth at lowest level in a decade by 5.3% last year. The country also experienced a trade deficit of U.S. $ 12.25 billion in 2009 after a surplus in the quarter I. Vietnam is also forced to devalue the dong buying surge following the U.S. dollar and gold by the public.

IMF Senior Representative in Vietnam Benedict Bingham said that growth this year largely determined by the balance of payments.

“If the government can mestabilkan macroeconomic conditions and created a more positive sentiment toward dong, I think 6% growth target could only be achieved,” he said.

The IMF last month reported the government stimulus package hit Vietnam’s balance of payments last year, threatening the country’s economic stability. “The cause of pressure on the balance of payments is a combination of increasingly wide trade deficit and the weakening sentiment on the dong, especially by Vietnamese investors,” said Bingham.

Traded at 18,474 dong per U.S. dollar at 2 pm in Hanoi, is lower than the black market exchange rate of about 19,300. The government only allows the currency to fluctuate 3% per day.

The central bank devalued the dong in November after a foreign exchange between the official and black market soared 10 times, more than 11%.

Johanna Chua, head of Asian economic research at Citigroup Inc., mengatkan skspor Vietnam should strengthen this year, among them due to the more competitive exchange rate.

Shipping to other countries rose 12% in December to U.S. $ 5.25 billion from U.S. $ 4.69 billion in November. Garment exports rose 12% to U.S. $ 820 million, while footwear products increased 22% to U.S. $ 420 million.

Bingham said export performance is relatively stable during December and imports lower than estimated, helping to improve the trade gap.

Inflation in Vietnam rose to 6.52% in December from 4.35% the previous month in line with growth of 6.9% in the quarter IV.

“The authority should look at inflation, especially if commodity prices continue to rise this year,” explained Bingham.