Asian currencies gained as European Union leaders made progress on stemming the debt crisis and after France turned to China for money to bolster the debt- stricken region’s bailout fund. The MSCI Asia-Pacific Index of stocks advanced 1.4 percent after French President Nicolas Sarkozy said EU leaders and banks have agreed to a 50 percent writedown on Greek debt and the region’s bailout fund will be enlarged. The accord came after an impasse at the Brussels summit late yesterday. “The news injected a bit more confidence into the market,” said Faizal Yussof, a currency trader at KAF Investment Bank Bhd. in Kuala Lumpur. “We still need to watch bank deleveraging and recapitalization. We are not out of the woods yet.”
South Korea’s won climbed 0.6 percent to 1,125.30 per dollar as of 12:10 p.m. in Seoul, according to data compiled by Bloomberg. The Philippine peso strengthened 0.2 percent to 43.10 and the Thai baht rose 0.1 percent to 30.78. The Bloomberg- JPMorgan Asia Dollar Index, which tracks Asia’s 10 most-traded currencies excluding the yen, rose 0.3 percent to 116.57, set for the highest close in five weeks.
Investors have agreed to a voluntary writedown of on Greek debt, equivalent to 100 billion euros ($140 billion), Sarkozy told reporters in Brussels today. The euro region’s bailout fund will be expanded by four to five times to $1.4 trillion, he said.
Korea GDP
The International Monetary Fund will be a partner in Europe’s bailout fund, Sarkozy said. He said he plans to call his Chinese counterpart Hu Jintao to ask Asia’s largest economy to contribute as well. Banks need 106 billion euros in fresh capital to weather the crisis, the European Banking Authority estimated.
The won extended gains after the Bank of Korea said today the economy grew at an annual rate of 3.4 percent last quarter, the same as in the preceding three months. Consumer confidence rose to 100 this month from 99 in September, the first increase since May, the central bank said.
“Market players tend to react more to positive news than negative news recently,” said Ha Jun Woo, a Seoul-based currency dealer with Daegu Bank. “South Korea’s GDP data was within expectations, and will have limited impact on the currency market.”
China’s yuan was little changed at 6.3532 per dollar in Shanghai. A government report showed industrial companies’ profits rose 27 percent in the first nine months of 2011 from a year earlier, compared with a 28.2 percent pace in the January through August period.
Elsewhere, Indonesia’s rupiah depreciated 0.2 percent to 8,893 per dollar, according to prices from local banks compiled by Bloomberg. Taiwan’s dollar was little changed at NT$30.129, while Malaysia’s ringgit weakened 0.2 percent to 3.1330 from Oct. 25. Financial markets in Malaysia were closed yesterday for a holiday. Onshore markets in India are closed today.