Asian currencies strengthened, led by South Korea’s won, on optimism the world’s fastest economic growth and rising interest rates will attract overseas funds. The Bank of Thailand is expected to raise borrowing costs today, while Malaysia’s central bank indicated last week that it was considering lifting interest rates further. Data today showed Chinese gross domestic product and factory output increased by more than economists forecast, and South Korean unemployment held at the lowest level since November. “Growth among Asia’s economies still looks very solid,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “The risk of inflation also suggests more possible monetary tightening. The bias is for regional currencies to strengthen.” The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, rose 0.1 percent, approaching a 14-year high touched on July 8. The won strengthened 0.4 percent to 1,062.65 per dollar, according to data compiled by Bloomberg. The Singapore dollar advanced 0.4 percent to S$1.2245, Thailand’s baht gained 0.3 percent to 30.27 and the Philippine peso climbed 0.3 percent to 43.090. Emerging-market economies in Asia will expand 8.4 percent this year, compared with 2.4 percent growth in the world’s developed economies, according to forecasts made by the International Monetary Fund in April. Chinese Growth Chinese industrial production advanced 15.1 percent in June from a year earlier, compared with the 13.1 percent median estimate of economists in a Bloomberg survey. Gross domestic product increased 9.5 percent in the second quarter, compared with 9.7 percent in the previous three months and the 9.3 percent analysts surveyed by Bloomberg had been expecting. The yuan strengthened 0.04 percent to 6.4697 per dollar. South Korea’s June jobless rate was 3.3 percent, lower than the median estimate in a Bloomberg News survey of 3.4 percent. Finance Minister Bahk Jae Wan said the data are “unexpectedly strong.” “Economic fundamentals have been relatively strong and that gives room for the currency to rise in the middle to longer term,” said Seo Jeong Hun, an analyst at Korea Exchange Bank in Seoul. “Currency gains have been limited by external factors such as ongoing concerns about the euro-zone debt crisis.” The baht snapped a two-day loss ahead of a rate review today at which the Bank of Thailand will lift the one-day bond repurchase rate by a quarter of a percentage point to 3.25 percent, according to 23 of 24 economists surveyed by Bloomberg News. One predicted no change. Incoming Thai leader Yingluck Shinawatra was among 28 percent of winning candidates in the July 3 elections that failed to receive immediate certification from the Election Commission, the agency said yesterday. Malaysian Interest Rates “The rate hike is one of the factors that drives the baht stronger,” said Disawat Tiaowvanich, a foreign-exchange trader at Bangkok Bank Pcl. “But the Election Commission’s news yesterday may also influence the baht, limiting gains.” Malaysia’s ringgit rose 0.3 percent to 3.0236 per dollar, following a 1.3 percent decline over the previous two days. Bank Negara Malaysia said in a July 7 statement it would consider further normalizing interest rates to safeguard price stability if domestic economic growth momentum is sustained. “The currency fell too much in the past two days,” said Akira Banno, a treasury adviser in Kuala Lumpur at Bank of Tokyo-Mitsubishi UFJ Bhd. Expectations that Bank Negara may raise rates “sooner or later will ensure that the Malaysian currency doesn’t fall too much,” he said. Malaysia will raise its benchmark rate to 3.5 percent by year-end, according to a Bloomberg survey of economists. The Southeast Asian nation kept its policy rate unchanged at 3 percent on July 7. Elsewhere, Indonesia’s rupiah strengthened 0.2 percent to 8,565 per dollar and Taiwan’s dollar appreciated 0.3 percent to NT$28.915. To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net Ronnie Harui in Singapore at rharui@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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