Asia Currencies Gain, Led by Taiwan, as Fed Easing Spurs Inflows

Asian currencies strengthened, led by Taiwan’s dollar and Indonesia’s rupiah, as the Federal Reserve’s asset-purchase plan spurred inflows into the region’s higher-yielding assets.

International investors increased holdings of South Korean, Taiwanese and Indonesian stocks by $1.8 billion on Sept. 14, a day after the Fed announced it would expand holdings of long- term securities with open-ended buying of $40 billion of mortgage debt per month in a third round of quantitative easing. The MSCI Asia Pacific Excluding Japan Index (MXAPJ) of shares touched a four-month high today after advancing by 3.1 percent, the most this year, on Sept. 14.

“The QE3 is giving a boost to sentiment and expectations of capital inflows,” said Wee-Khoon Chong, a fixed-income strategist at Societe Generale SA in Hong Kong. “The boost for the foreign-exchange rate from QE3 is likely to be temporary.”

via 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.