Asian currencies strengthened, led by Malaysia’s ringgit, on the prospect of more interest-rate increases and as an agreement to raise the U.S. debt ceiling boosted demand for emerging-market assets. The Bloomberg-JPMorgan Asia Dollar Index approached a 14- year high reached last week as data showed export growth and consumer-price gains in South Korea exceeded economist’s predictions, while Chinese manufacturing growth also beat forecasts. The MSCI Asia-Pacific Index of shares snapped a three-day loss as President Barack Obama said leaders of both parties in the House and Senate had reached an agreement to raise the nation’s debt ceiling and cut the federal deficit. The Asia Dollar Index gained 0.2 percent to 120.16 as of 10:33 a.m. in Hong Kong. The ringgit jumped 0.8 percent to 2.9445 per dollar and South Korea’s won climbed 0.5 percent to 1,049.20, according to data compiled by Bloomberg. The Philippine peso rose 0.5 percent to 41.935 and Thailand’s baht gained 0.4 percent to 29.73. “Data in Asia are spurring speculation of more rate hikes in the region, boosting its yield advantage,” said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo. “The U.S. agreement also improves sentiment for risk- taking, which is generally positive for Asia’s emerging-market currencies.” China’s Purchasing Managers’ Index was at 50.7 for July, more than the 50.2 median forecast in a Bloomberg survey. A reading above 50 indicates expansion. The yuan was little changed at 6.4365 per dollar after rising 0.15 percent last week. Regional Growth Global funds bought $3 billion more Indonesian, South Korean and Thai stocks than they sold in July, according to exchange data. Asia’s emerging-market economies will expand 8.4 percent in 2011, almost quadruple the 2.2 percent growth projected for developed nations, the International Monetary Fund said in June. India, South Korea, China, Indonesia, the Philippines, Malaysia, Taiwan and Thailand all raised borrowing costs this year. India’s benchmark rate is 8 percent and Indonesia’s is 6.75 percent, compared with a maximum 0.25 percent in the U.S. and Japan. The won approached a three-year high after a report showed consumer prices rose 4.7 percent last month, more than the 4.4 percent median forecast in a Bloomberg survey. A separate report showed exports climbed 27.3 percent from a year earlier in July, compared with a revised gain of 13.6 percent the previous month, contributing to a record trade surplus. ‘Countering Inflation’ “The inflation data shows the government will focus on countering inflation,” said Kim Sung Soon, a Seoul-based senior currency trader at the state-run Industrial Bank of Korea. “The case for further interest-rate rises is strengthened.” The baht rose by the most in a week before a report that will show consumer prices rose 4.2 percent in July from a year earlier, the most since September 2008, according to the median forecast in a Bloomberg survey before data due at 10:30 a.m. in Bangkok. Indonesia’s rupiah gained 0.3 percent to 8,482 per dollar. A report due around 11 a.m. local time will show inflation slowed to 4.8 percent last month from 5.5 percent in June, according to economists surveyed by Bloomberg. Exports climbed 44.3 percent in June after having gained 45.3 percent the previous month, a separate poll showed before data due today. Elsewhere, the Taiwan and Singapore dollars strengthened 0.3 percent against their U.S. counterpart to NT$28.807 and S$1.2015, respectively. To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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