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Won leads Asia gains, ringgit rises as US dollar dips on mixed data
[SEOUL] South Korea's won rose the most in more than a week and Malaysia's ringgit strengthened as the dollar weakened after mixed US economic data.
The won advanced 0.4 per cent to 1,133.58 a US dollar as of 10:37am in Seoul, on course for its biggest gain since Oct 10. The ringgit appreciated 0.2 per cent to 4.2125. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 peers, fell 0.2 per cent following a 0.3 per cent decline on Monday.
Reports released Monday showed manufacturing in New York unexpectedly contracted, while factory production across the US grew for the third time in four months.
The data are unlikely to bolster the case for a Federal Reserve rate increase, which futures contracts show has a 66 percent chance of happening before the end of the year.
"US rate hike speculation has weakened along with the dollar following the mixed US data," said Sun Sung In, an economist at Shinhan Investment Corp in Seoul, said in a note released Tuesday.
"This has turned the dollar weaker against major currencies," she said, adding that the won would likely trade in a 1,132 to 1,142 a US dollar range on Tuesday.
Investors will be closely watching the release of a batch of Chinese economic reports, including third-quarter gross domestic product, on Wednesday. The onshore yuan has weakened one per cent against the US dollar over the last seven sessions.
"The Chinese yuan, which is like an anchor for the whole of Asia, is still depreciating," said Peter Chia, a foreign-exchange strategist at United Overseas Bank Ltd in Singapore.
"It's still a bit early to say that Asian currencies are turning here." South Korea's three-year sovereign bonds rose, pushing the yield down one basis point to 1.34 per cent. The 10-year yield was steady at 1.62 per cent.