Asian Currencies Advance Again

Asian currencies headed for a third weekly gain, led by South Korea’s won, on optimism the Federal Reserve will delay any reduction in stimulus after a budget impasse threatened the world’s largest economy.

The Bloomberg-JPMorgan Asia Dollar Index extended its advance from Oct. 11 to 0.4 percent after U.S. President Barack Obama signed legislation yesterday that ended a 16-day partial government shutdown and deferred funding and debt ceiling deadlines into 2014. The “fiscal shenanigans” undermined the case for tapering the Fed’s $85 billion in monthly bond buying, Dallas Fed President Richard Fisher said yesterday.

“The removal of the U.S. default risk added to improving risk sentiment,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo. Speculation the Fed “will not rush to reduce stimulus already gave some underlying support to emerging-market assets,” he said.

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.