TOKYO: Emerging market currencies got a boost Thursday after a surge in oil prices eased fears about slumping demand and a weak global economy.
The gains tracked rallies across equities markets as investors went into the Christmas break with some festive cheer, helping to erase some hefty rent losses as the euphoria of the Federal Reserve’s interest rate hike last week wanes.
The US Department of Energy said stockpiles tumbled in the week ending December 18, while imports fell about 13 percent week on week.
The news led to hopes that a sell-off in the commodity—fuelled by a supply glut and weak global demand that has seen the Brent contract plumb to 11-year lows—may be nearing an end.
In response, oil producer Malaysia’s ringgit bounced 0.5 percent against the dollar, while the Indonesian rupiah added 0.2 percent, South Korea’s won gained 0.3 percent and the Taiwan dollar edged up 0.2 percent.
The dollar also struggled against its major peers, weakening to 120.69 yen from 120.87 yen Wednesday in New York.
The euro rose to $1.0928 from $1.0910, and was at 131.90 yen from 131.87 yen in New York.