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Won, Singapore dollar rise after Geithner’s remarks

Asian currencies
BANGKOK: The South Korean won and the Singapore dollar rose on Friday after US Treasury Secretary Timothy Geithner urged G20 members to avoid a currency war, but there was little reaction in other Asian currencies. Geithner said in letter to a G20 finance ministers’ meeting in South Korea that the group’s members should refrain from currency policies aimed at gaining a competitive edge.
The won shot up to 1,122.6 per dollar in afternoon trade after his remarks from 1,135.0 earlier. The Singapore dollar firmed to 1.2974 per dollar from 1.3009 in the morning and 1.3020 late on Thursday. The reaction in other Asian currencies was more modest.
The South Korean won rallied after Geithner urged G20 countries not to weaken or prevent appreciation of undervalued currencies. The remarks prompted investors to short the dollar.
The Malaysian ringgit trimmed its losses in the afternoon, when the spot rate was quoted at 3.1055 per dollar, against 3.1095 in the morning and 3.1045 late on Thursday.
“If there is no solid discussion from the G20 meeting, I think the market will continue to sell the dollar next week,” a dealer in Kuala Lumpur said.
The ringgit has appreciated 10.2 per cent against the dollar this year. The Thai baht eased to around 29.88 per dollar in sluggish trade while the market watched for statements coming out of the G20 meeting.
“We don’t expect any meaningful results from the G20 meeting in terms of changing the bearish dollar outlook. It is basically a US-China conflict. After expected pledges against market intervention, most members of the group will probably return to steering their currencies in favour of their economies,” a dealer at a Thai bank said.
Dollar/baht was bid at 29.87 at 0700 GMT against 29.83 late on Thursday. The baht has gained 11.6 per cent this year, making it the second-strongest Asian currency after the yen. -Reuters


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