SINGAPORE (Nov 4): The won and most emerging Asian currencies rose on Friday amid hopes that Greece may not face a disorderly default, but they are still headed for weekly losses, suggesting investors are still hesitating to increase exposure in regional units.
Greek Prime Minister George Papandreou bowed to cabinet rebels and agreed to step down and make way for a negotiated coalition government if his Socialist lawmakers back him in a confidence vote later in the day, raising hopes for a political consensus on the euro zone's rescue framework.
The surrender boosted riskier assets such as stocks and other emerging currencies including Mexico's peso.
The South Korean won rose on local interbank speculators' demand with foreign investors turning to net buyers in the country's stock markets.
The Taiwan dollar also gained led by stock inflows while the central bank was spotted buying U.S. dollars to cap the local dollar's rises.
Still, investors remained cautious over the euro zone's debt and financial crisis with government bonds of Italy, Spain and even France trading with hefty spreads over German bonds. Market players are also keeping an eye on the Greek confidence vote.
"The markets remain tenacious and eager to latch on to any positive development on the risk appetite front," said Emmanuel Ng, FX strategist at OCBC in Singapore.
"But the risk relief run is probably at its tail end now, and any further strengthening would have to be on the back of a significant change in the global landscape. So we would probably look for better levels to initiate fresh shorts (in dollar/Asia)."
Emerging Asian currencies lost rising momentum from last month after Papandreou's surprising call for a referendum rattled global financial markets. Despite Friday's rises, most of the regional units stay weaker than a week ago.
The Malaysian ringgit has lost 1.9 percent against the dollar so far this week, according to Thomson Reuters data. The Singapore dollar also has shed 1.7 percent.
Greek Prime Minister George Papandreou bowed to cabinet rebels and agreed to step down and make way for a negotiated coalition government if his Socialist lawmakers back him in a confidence vote later in the day, raising hopes for a political consensus on the euro zone's rescue framework.
The surrender boosted riskier assets such as stocks and other emerging currencies including Mexico's peso.
The South Korean won rose on local interbank speculators' demand with foreign investors turning to net buyers in the country's stock markets.
The Taiwan dollar also gained led by stock inflows while the central bank was spotted buying U.S. dollars to cap the local dollar's rises.
Still, investors remained cautious over the euro zone's debt and financial crisis with government bonds of Italy, Spain and even France trading with hefty spreads over German bonds. Market players are also keeping an eye on the Greek confidence vote.
"The markets remain tenacious and eager to latch on to any positive development on the risk appetite front," said Emmanuel Ng, FX strategist at OCBC in Singapore.
"But the risk relief run is probably at its tail end now, and any further strengthening would have to be on the back of a significant change in the global landscape. So we would probably look for better levels to initiate fresh shorts (in dollar/Asia)."
Emerging Asian currencies lost rising momentum from last month after Papandreou's surprising call for a referendum rattled global financial markets. Despite Friday's rises, most of the regional units stay weaker than a week ago.
The Malaysian ringgit has lost 1.9 percent against the dollar so far this week, according to Thomson Reuters data. The Singapore dollar also has shed 1.7 percent.
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