Asian economies are stabilizing. China's manufacturing expanded for a fifth month in April while its foreign-exchange reserves climbed 3.9 percent in the first quarter of 2012 to $3.3 trillion, official data show. Consumer-price gains slowed to 3.4 percent last month from 3.6 percent in March.
Developing Asian economies grew 7.8 percent in 2011, compared with 5.3 percent for central and eastern Europe and 4.5 percent for Latin America, according to the International Monetary Fund. The average cost of insuring emerging Asia's sovereign debt for five years using credit-default swaps fell 34 basis points this year to 158 yesterday. That compares with 310 basis points for Latin America and 373 for emerging Europe.
The risk reversal for the baht, the smallest after the yuan, narrowed 14 basis points this year to 61 basis points, and the rate for Taiwan's dollar fell 17 basis points, or 0.17 percentage point, to 69 basis points. The rate for the Philippine peso slumped to 97 basis points from 150 basis points.
Gross domestic product in China increased 8.1 percent from a year earlier in the first quarter, the least since mid-2009, and signs of stabilization have led to a reduction in bets that the dollar will appreciate.
The premium charged for the right to sell China's yuan in a month over contracts to buy the currency, known as the risk- reversal rate, was 15 basis points as of 2:14 p.m. in Shanghai, down from 64 basis points at the end of last year.
Among 22 emerging-market currencies, nine of the 10 lowest rates are in Asia with an average premium of 71 basis points on May 2, the lowest since April 2011. Traders pay 375 basis points extra for the right to sell Brazil's real, the biggest premium among developing nations.
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.Read the Terms of Service