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.
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