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Asian Economies Rebounding in Q3

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Asian Economies Rebounding in Q3

The worst of the declines in Asia- Pacific economies may be moderating, as Taiwan resumed growth last quarter, South Korean production climbed for the first time in four months and Singapore's jobless rate fell.

Gross domestic product in Taiwan grew 1.02 percent from a year earlier, after a 0.18 percent decline the previous quarter, a report showed today. South Korea's industrial output rose 0.8 percent last month from August on stronger car and electronics sales, while Singapore's unemployment rate eased to 1.9 percent, the lowest since the first quarter of 2011.

Pedestrians walk past stores in the shopping district of Ximending in Taipei, Taiwan. Signs that China's growth is recovering have brightened the outlook for the region's exports and boosted currencies. Photographer: Lam Yik Fei/Bloomberg

China's economy has shown signs of rebounding this quarter, boosting the outlook for the region's exports. While Asian stocks rose today, the recovery in growth may be constrained by Japan's persistent slump and limited expansions in the U.S. and Europe, sustaining pressure for policy stimulus in some Asia- Pacific countries.

“We may be seeing a bottoming in Asia but there won't be a strong recovery in the short term, given the global environment,” said Edward Lee, a Singapore-based economist at Standard Chartered Plc. “There are still a lot of potholes in the world economy which will clearly have an impact on Asia. In some places, we are still calling for more monetary policy easing,” including South Korea and Thailand, he said.

The MSCI Asia Pacific Index (MXAP) added 0.6 percent at 12:06 p.m. Tokyo time, trimming a monthly loss. South Korea's won touched a 13-month high while the Australian and New Zealand dollars rose after data showed better-than-expected building approvals in September for both countries. The Taiwan dollar gained 0.2 percent against the U.S. currency as of 11:21 a.m. in Taipei.

Via – Bloomberg

 

Asia Currency Basket (1M)

http://forexblog.oanda.com/mserve/AsiaBasket_311012.PNG

Though Asia economy appears to be recovering, the same cannot be said for their currencies, which has actually depreciated against USD significantly over the past month. Safe haven flows can be attributed to USD strength, but perhaps US fundamentals are also helping, with GDP, Goods Orders and various economic indicators posting better than expected results recently.

For more information about OANDA's Asia Currency Basket, click here

 

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Posted-In: News Forex Global Markets

 

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