Most emerging Asian currencies rose on Friday and were on the course for weekly gains with pressure mounting on policymakers of the world's 20 rich countries to corporate, tackle global market turmoil and economic slowdown. The Singapore dollar advanced with industrial production in January stronger than expected. The South Korea won edged up on month-end demand from exporters for settlements.
China's yuan eased as the central bank set its daily guidance rate softer and was seen staying on the sidelines with finance ministers and central bankers from the Group of 20 meeting in Shanghai. Policy makers are discussing measures to keep the global economy on track, but they have provided reassuring comments so far but little in the way of actual policy stimulus.
"Despite this glimmer of optimism that we are seeing leading up to this weekend's G20 summit, the likelihood of a co-ordinated policy pact is doubtful," said Stephen Innes, senior trader, OANDA Asia Pacific in Tokyo. "Instead, the big fear is that whatever sliver of optimism investors currently have in an otherwise dreary outlook will be further eroded after the summit. So, we could be in for some messy markets next week," he added.
The Indonesian rupiah has risen 0.8 percent against the dollar so far this week, leading weekly gains among emerging Asian currencies, as investors sought one of the highest yields in the region. Singapore's dollar has gained 0.4 percent on January factory output data and fourth-quarter economic growth numbers beat forecasts. The central bank said the current monetary policy stance remains appropriate, although analysts continued to see risks of easing in April as a sluggish global demand kept denting the trade-dependent economy.
The Philippine peso has edged up 0.2 percent, while the Thai baht was up 0.1 percent. Still, analysts doubted if regional currencies could extend gains. "Nothing has changed in terms of local negative dynamics," said Heng Koon How, senior currency strategist for Credit Suisse Private Banking Asia Pacific in Singapore. "Ongoing export contraction across the region, coupled with anticipated renewed weakness in the CNY will continue to weigh down on Asian currencies," Heng said, referring to the yuan.
The renminbi has eased 0.3 percent so far this week, which would be the first weekly depreciation in six weeks. The won also lost 0.3 percent for the week as offshore funds continued to sell the South Korean currency with signs of Asia's fourth-largest economy losing steam. Caution grew over possible intervention to stem further weakness in the worst-performing Asian currency so far this year, but the foreign exchange authorities were not seen "aggressively" defending it, traders said. "As the authorities' attitude was not that strong, there are few reasons to expect the won's rebound," said a foreign bank trader in Seoul. "Dollar demand became aggressive with importers trying to buy dollars on any dips."
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