May 5, 2008
Yuan gains will slow in May for a second month as Chinese policy makers seek to aide economic growth, before accelerating the advance in the second half of the year, according to Royal Bank of Scotland Group Plc.
The currency posted its smallest gain in a year last month and was little changed today after central bank Governor Zhou Xiaochuan said the nation’s export expansion has decelerated.
RBS recommends betting on the yuan’s advance using forwards as China will use currency appreciation to encourage exporters to make “high-value-added goods,” instead of cheaper products.
The yuan traded at 6.9882 per dollar as of 3:15pm in Shanghai, compared with 6.9875 on April 30 when it last traded because May 1 and May 2 were holidays, according to the China Foreign Exchange Trade System.
RBS, the U.K.’s second-biggest bank, forecasts the yuan rising at a 10 percent annualized rate in the second half of the year, and ending 2008 at 6.4 per dollar.
Twelve-month non-deliverable forwards contracts, agreements in which assets are bought and sold at current prices for future delivery, had the biggest monthly decline in four years in April, showing an implied rate for the yuan of 6.4135 compared with 6.3270 at the end of March. The contracts are non-deliverable because they are settled in dollars and not the local currency.
China will increase flexibility in the yuan, Vice Finance Minister Li Yong said in Madrid today, predicting economic growth may exceed the government’s 8 percent target this year.
Exports expanded by 21.4 percent to $306 billion in the first quarter, slowing from an increase of 27.8 percent a year earlier.
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Posted by fvarga
May 5, 2008
Singapore’s dollar gained on speculation rising local stocks will lure overseas investors to the island’s assets.
Singapore’s currency has climbed 1.8 percent in the past month, posting the biggest rise among the region’s most-traded currencies.
The nation’s benchmark stock index rose for a second day after a U.S. government report on May 2 showed job losses were not as large as economists expected in April, spurring optimism demand from Singapore’s second-largest export market will be resilient.
The Singapore dollar rose 0.2 percent to SGD1.3601 against the U.S. currency as of 4:56pm local time, according to data compiled by Bloomberg.
The Straits Times index advanced 0.5 percent, extending last Friday’s gain of 2.8 percent.
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Posted by fvarga
May 5, 2008
The yen traded near a two-month low against the dollar as a rally in equities gave investors confidence to buy higher-yielding assets financed in Japan.
The currency may decline for a third day against the dollar as traders increased bets the Federal Reserve will stop cutting interest rates after the U.S. lost fewer jobs in April than economists forecast. The yen fell against the euro as a measure of stock volatility slid to the lowest since October.
The yen traded at 105.39 against the dollar as of 9:34am in Tokyo from 105.40 late in New York on May 2 when it touched 105.70, the lowest level since Feb. 28.
It was at 162.79 per euro from 162.53. The euro was at $1.5447 from $1.5424 late last week when it reached $1.5361, the lowest since March 24.
The currency may fall to 105.80 versus the dollar today.
Currency trading may be less than normal as Japan’s financial markets are closed for a public holiday.
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Posted by fvarga
May 5, 2008
This morning Asia advances on rally in commodities:
Nikkei: 14,049.26 gaining +282.4 (+2.05%)
Hang Seng: 26,241.02 gaining +485.67 (+1.89%) and
Singapore ST: 3,267.60 gaining +31.50 (+0.97%).
Taiwan opened slightly higher this morning but lost its small gains around 10:00 (GMT+8):
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