Emerging currencies up on stimulus hope, easing Brexit woes
AFP
June 30, 2016 14:23 MYT
June 30, 2016 14:23 MYT
The pound sank on June 27 to 30-year lows while most stock markets tumbled following Britain's decision to leave the European Union, with traders fearing it will lead to months of uncertainty. - AFP Photo
Investors' taste for risk picked up in Asian currency trading Thursday with the South Korean won and Malaysian ringgit rising on stimulus hopes and as fears about Britain's exit from the EU ease.
The pound held on to most of its gains against the dollar after diving to 31-year low this week, as Britain's vote to quit the European Union sent a shiver across world financial markets.
Speculation that authorities will announce monetary easing measures to offset any negative impact have supported markets in recent days, after a US$17 billion (RM68.5 billion) boost by South Korea.
Some of the initial fears about the impact of the vote appear to have calmed despite a litany of questions hanging over Britain's future as it looks for a divorce agreement EU partners.
"Markets have been unwinding excessive risk aversion moves as the Brexit impact will only become clear over the long run," Yasuhiro Kaizaki, vice president for global markets at Sumitomo Mitsui Trust, told Bloomberg News.
In Tokyo trade, the won jumped 0.6 percent against the greenback, the ringgit added 0.4 percent and the Taiwan dollar was up 0.2 percent.
The pound fetched US$1.3395, down from US$1.3455 in New York, but still well up from earlier this week when it dived to US$1.3121, the lowest since September 1985.
The dollar bought 102.77 yen from 102.80 yen, while the euro weakened to US$1.1105 and 114.17 yen from US$1.1124 and 114.35 yen.
"With Brexit in a state of limbo for now, markets will likely return some focus to other matters, including the data flow and central bank guidance," said National Australia Bank senior economist David de Garis.