The Asian currencies, led by the Malaysian ringgit, gained today on the speculation that the Federal Reserve will boost stimulus to the US economy, improving prospect for Asia’s exports.
Fed Chairman Ben Bernanke testified yesterday, speaking about the problems that the economic recovery has encountered. He said:
Recent revisions of government economic data show the recession as having been even deeper, and the recovery weaker, than previously estimated; indeed, by the second quarter of this year–the latest quarter for which official estimates are available–aggregate output in the United States still had not returned to the level that it had attained before the crisis.
Market participants viewed the testimony as a signal that the US central bank will continue to stimulate the economy. The speculation about recapitalization of bank in Europe and the quantitative easing in the US improved risk appetite. Malaysiaâs exports advanced 8 percent in August (on
USD/MYR fell from 3.2010 to 3.1910 today as of 11:34 GMT, while earlier the currency pair reached the low of 3.1823.
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