Peso climbs against greenback on large capital inflows
Peso climbs against greenback on large capital inflows
Bloomberg, Singapore
The Philippine peso had its highest close in 15 months as the
government said the country will stay on the largest U.S. pension
fund's list as a permissible investment destination.
Overseas money managers bought a daily average 555 million
pesos (US$10 million) of Philippine shares last month, according
to Bloomberg data, helping the currency gain 2.1 percent.
"There's bullish peso sentiment," said Rafael Algarra, head of
currency and fixed-income trading at Security Bank Corp. in
Manila. "I expect more inflows into stocks and government
securities."
The peso gained 0.2 percent to 55 per dollar in Manila, its
strongest close since Oct. 21, 2003, according to the Bankers
Association of the Philippines.
The Philippines will remain a "permissible" market for Calpers
after receiving a "passing score" from the fund's adviser, the
government said today in a statement. The country's dollar-
denominated bonds on Monday rose to a nine-month high as the
government said the economy grew at its fastest in 15 years.
The Labor Department on Feb. 4 will say the U.S. economy
created 200,000 jobs, according to the median forecast in a
Bloomberg poll of 58 economists. Job creation averaged 186,000 a
month last year.
South Korea's won dropped for a second day on speculation the
central bank will sell the currency to maintain the country's
export competitiveness with Japan as the yen traded near its
lowest in a week against the dollar.
Won gains make it more difficult for companies such as Samsung
Electronics Co., South Korea's biggest exporter, to attract
buyers away from Japanese rivals.
Sales overseas make up about 40 percent of the South Korean
economy.
"Everybody wants to buy the dollar against the won as the yen
went lower," said Koby Koo, a Seoul-based currency trader at
Korea Exchange Bank.
The won fell 0.2 percent to 1,027.80, according to Seoul Money
Brokerage Services Ltd. A declining currency raises the foreign-
exchange proceeds exporters can make.
The Bank of Korea may want to sell won to prevent it from
rising past 1,025, Koo said.
Other Asian currencies may extend a decline from Monday after
China doused speculation it will allow the yuan to strengthen.
China's Vice-Premier Huang Ju and deputy central bank governor
Li Ruogu on Jan. 29 said they want a stable exchange rate.
Without a rising yuan that would raise China's purchasing power
in Asia and make the country's exports costlier to buy, regional
central banks may not let their currencies advance.
"You shouldn't bet on a huge revaluation," said Bhanu Baweja,
a senior currency strategist at UBS AG in Singapore. China may
alter its peg by the middle of the year, "but most importantly,
it'll be a very small move."
The yuan may rise to 8.19 by the end of this year from the
pegged rate of around 8.3, Baweja said. South Korea's won will
probably slide to 1,040 in a month, he said.
The Group of Seven industrialized countries since September
2003 have called on China to make the peg more flexible. G-7
finance ministers and central bankers meet in London on Feb. 4-
5. Chinese officials will also attend the meeting.
The Singapore dollar fell 0.2 percent to S$1.6416, Thailand's
baht weakened 0.1 percent to 38.60, and the Indian rupee held at
43.70. The Taiwan dollar closed little changed at NT$31.798
against its U.S. counterpart.