July, 25 (Agencies) — Chinese yuan and Malaysian ringgit were among lead gainers among emerging Asian currencies on Tuesday as investor sentiment received a boost from a string of promised measures in the region’s largest economy to stimulate growth.
Yuan strengthened as much as 0.6%, to trade at 7.141 per dollar, hitting its highest in about two weeks, while ringgit followed closely with a 0.1% gain. “EM currency rally is being supported by the yuan after the Politburo meeting yesterday, because it signals some policy change in China and that there could be more stimulus packages going ahead,” Chief Asia FX Strategist Ken Cheung at Mizuho Bank said.
China’s top leaders said on Monday that they will step up policy support for the beleaguered economy, focusing on expanding domestic demand, boosting confidence and preventing risks.
“Execution and depth of these policies will be the real test. The financial markets will keenly watch how China manages to implement these directives,” Tommy Xie Dongming, an economist from OCBC wrote.
Other currencies such as the Singapore and Taiwan dollars gained about 0.1% each.
Additionally, investors are on watch for the upcoming US Federal Reserve meeting later this week, where a 25 basis point hike is widely expected before the central bank announces a pause in its aggressive rate hike cycle.