Asian currencies rose, led by a gain in Malaysia’s ringgit to the highest level in more than two years, as signs of economic recovery in the region boosted investor demand for emerging-market assets. The ringgit rallied 1 percent, its biggest advance in six weeks, before a government report tomorrow that may show exports increased for a seventh month in June, according to a Bloomberg News survey. South Korea’s won climbed for a second day and stocks rose after data yesterday showed overseas sales in July beat analysts’ estimates. “Stocks are doing quite well today and that is leading Asian currencies higher,” said Robert Reilly, co-head of Asian fixed-income at Societe Generale in Hong Kong. “We had some good data out of South Korea and that’s helping the won and leading the others along too.” The ringgit traded at 3.1610 per dollar as of 12:35 p.m. in Kuala Lumpur and reached 3.1560, the strongest level since May 2008, according to data compiled by Bloomberg. The won appreciated 0.9 percent to 1,172.83 and Taiwan’s dollar climbed as much as 0.8 percent to NT$31.798, its highest since June 22. The Bloomberg-JPMorgan Asia Dollar Index of regional currencies and the MSCI Asia-Pacific Index of shares both rose to their strongest levels since early May. Foreign investors bought almost a net $9 billion of stocks in India, Indonesia, South Korea, Taiwan, Thailand, Vietnam and Pakistan in July. Asia is leading the world economy out of recession, prompting regional central banks to withdraw stimulus measures put in place during the financial crisis. U.S. Growth U.S. gross domestic product increased at a 2.4 percent annual pace last quarter, less than the median estimate in a Bloomberg survey for 2.6 percent, data from the Commerce Department showed on July 30. A report from the Institute for Supply Management later today may show growth in July’s manufacturing cooled, according to another survey. “There’s a shift in thinking and fund flows favoring Asian local markets as the U.S. economy slows,” said Suresh Kumar Ramanathan, a currency strategist at CIMB Investment Bank Bhd. in Kuala Lumpur. “It’s not just one that’s based on sentiment, it’s clearly a clear fundamental story now.” China’s yuan forwards rose the most in more than a week even as reports showed manufacturing is cooling, after People’s Bank of China Deputy Governor Hu Xiaolian said in a July 30 statement that the relaxation of exchange-rate controls aided in balancing international payments, boosting domestic demand and economic structuring. Yuan Policy The Purchasing Managers’ Index fell to 51.2 from 52.1 in June, the Federation of Logistics and Purchasing said on its website yesterday. A reading above 50 indicates expansion. A PMI released today by HSBC Holdings Plc and Markit Economics fell to 49.4 from 50.4 in June. Twelve-month non-deliverable forwards contracts rose 0.16 percent to 6.6750 per dollar in Hong Kong, according to data compiled by Bloomberg, reflecting bets the currency will strengthen 1.5 percent from the spot rate of 6.7728. “Slower economic growth won’t likely shift the direction of allowing gradual appreciation in the yuan as policy makers are not focusing on the pace of growth,” said Liu Dongliang, a Shenzhen-based analyst at China Merchants Bank Co., the country’s fifth-largest lender by market value. “The yuan rate will be more affected by movements of major global currencies in the near term.” Elsewhere, Indonesia’s rupiah rose 0.1 percent to 8,943 per dollar, Thailand’s baht gained 0.2 percent to 32.22 and the Philippine peso climbed 0.4 percent to 45.32. Singapore’s dollar reached a two-year high of S$1.3533.

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