Asian currencies were set for the biggest weekly gain in a year as the Federal Reserve’s unexpected decision to maintain its record stimulus fuels demand for emerging-market assets.
Malaysia’s ringgit and India’s rupee led the advanced after Fed Chairman Ben S. Bernanke said Sept. 18 more evidence of a recovery in the world’s largest economy is needed before the central bank starts paring its $85 billion a month of bond purchases. Global funds bought $494 million more stocks than they sold so far this week in Indonesia, the Philippines and Thailand, the markets where data through yesterday is available.
“Investors reversed positions built up across the board on speculation about the stimulus reduction,” said Tohru Nishihama, an economist covering emerging markets at Dai-ichi Life Research Institute Inc. in Tokyo. “But the Fed will eventually trim stimulus, and investors will become more selective. The long-term trend of gradual dollar appreciation may remain intact.”
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.