Asian currencies make run on US economic hopes

SHANGHAI/KUALA LUMPUR — Asian currencies had their best week in more than two months on speculation an economic recovery in the US will boost demand for the region’s exports.

By Judy Chen And Liau Y-sing (Bloomberg)

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Published: Sun 31 Mar 2013, 10:01 PM

Last updated: Sat 4 Apr 2015, 7:53 AM

Gross domestic product in the world’s largest economy rose faster than previously estimated in the fourth quarter, while orders for durable goods climbed more than forecast in February, reports showed last week. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the 10 most-active currencies in the region excluding the yen, advanced 0.2 per cent since March 22.

“The expectation is that the US economy will continue to improve,” said Yeah Kim Leng, chief economist at RAM Holdings in Kuala Lumpur. “With a stronger US recovery, export- oriented Asian economies will benefit, strengthening their currencies.”

The ringgit advanced 0.6 per cent this week to 3.0938 per dollar in Kuala Lumpur, according to data compiled by Bloomberg. South Korea’s won climbed 0.7 per cent to 1,111.35 and Taiwan’s dollar rose 0.1 per cent to NT$29.875.

The Asia Dollar Index lost 0.3 per cent this month as global investors pulled $2.8 billion out of the stock markets of South Korea and Taiwan amid concern Europe’s debt crisis will worsen.

The Malaysian currency touched a five-week high of 3.0859 on March 25 after the central bank said the previous week that gross domestic product will increase as much as six per cent this year from 5.6 per cent in 2012. Prime Minister Najib Razak has embarked on a $444 billion spending programme to build railways, roads and power plants in an effort to lift the country to developed-nation status by 2020.

China’s yuan touched a 19-year high on Friday after the People’s Bank of China, or PBOC, raised the reference rate to the strongest level in more than 10 months. The PBOC increased the daily fixing by 0.08 per cent to 6.2689 per dollar, the highest since May 2, 2012.

The yuan advanced 0.02 per cent this week to 6.2108 per dollar, prices from the China Foreign Exchange Trade System show. The currency rose as high as 6.2086 on Friday, the strongest level since the government unified official and market exchange rates at the end of 1993.

The Korean won had the first weekly gain in almost a month after data showed South Korea’s current-account surplus widened in February.

Elsewhere, Thailand’s baht was steady from a week earlier at 29.28 per dollar, according to data compiled by Bloomberg. Financial markets in India, Indonesia and Philippines were closed on Friday. India’s rupee gained 0.1 per cent from March 22 to 54.28 per dollar on March 28, while Indonesia’s rupiah advanced 0.3 per cent to 9,715. The Philippine peso appreciated 0.1 per cent to 40.823 on March 28.

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