Asian Currencies Set for Best Month of 2009 as Stocks Rally

[Enivid]

Asian currencies headed for the first monthly gain since December as stocks rallied on optimism government stimulus spending will help revive regional economies and draw investors back to emerging markets.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the 10 most-active currencies excluding the yen, climbed 2.3 percent in March, trimming a loss for the quarter to 3 percent. Overseas funds bought more shares than they sold this month in South Korea, Indonesia, Taiwan and Thailand, putting the MSCI Asia Pacific Index on course for its biggest monthly advance in almost a decade. The rally in Asian currencies may be reaching a peak, according to Calyon, a unit of France’s Credit Agricole SA.

“Various currencies like the Korean won had been heavily oversold and were due for some sort of a pull back,” said Mitul Kotecha, head of global foreign-exchange strategy at Calyon in Hong Kong. “Some equity markets rallied around 20 percent which eased risk aversion and helped capital flow back into many Asian markets.”

The Korean won traded at 1,393.25 per dollar as of 12:38 p.m. local time, according to Seoul Money Brokerage Services Ltd. It is up 10 percent in March, the best performing Asian currency. Indonesia’s rupiah trailed, rising 3.5 percent to 11,580, followed by Taiwan’s dollar, which appreciated 2.8 percent to NT$33.987.

From Bloomberg News.