Asian currencies rose to a one-month high after Chinese manufacturing data brightened the regional export outlook and on speculation Europe will contain its debt crisis, cooling demand for the safety of dollars. China’s manufacturing may expand in October for the first time in four months, snapping the longest contraction since 2009, a preliminary index released by HSBC Holdings Plc and Markit Economics yesterday showed. The European Financial Stability Facility can be bolstered under two models that may be combined and implemented “quickly,” a document provided to German lawmakers yesterday showed. Europe’s leaders meet tomorrow to find a solution to the debt crisis. “Risk appetite is coming back into Asian currencies on hopes for a comprehensive resolution at the European summit,” said Choong Yin Pheng, manager for economic and fixed-income research at Hong Leong Bank Bhd. in Kuala Lumpur. “The greenback is battered down in the short term. The won strengthened 0.6 percent to 1,128.25 per dollar as of 11:23 a.m. in Seoul, according to data compiled by Bloomberg. Thailand’s baht climbed 0.7 percent to 30.79 from Oct. 21 and Malaysia’s ringgit rose 0.3 percent to 3.1253. Thai financial markets were closed yesterday for a public holiday. The Bloomberg-JPMorgan Asia Dollar Index rose 0.2 percent. Overseas investors bought $689 million more Taiwanese, South Korean and Indonesian stocks than they sold yesterday, according to exchange data. U.S. Growth A Commerce Department report on Oct. 27 will show the U.S. economy expanded 2.5 percent last quarter, the most in four quarters, according to a Bloomberg survey. The Federal Reserve may embark on another round of bond buying that increases the supply of dollars to support growth if warranted, Vice Chairman Janet Yellen said on Oct. 21. “There has been some talk of quantitative easing in the U.S., which stoked speculation of fund inflows into Asia again,” said Daisuke Uno, Tokyo-based chief strategist at Sumitomo Mitsui Banking Corp. “That will boost emerging-market currencies.” The won was poised for its best two-day rally since Sept. 28 and touched a five-week high. “The won will extend gains as investors look forward to the European summit tomorrow,” said Yu Won Jun, a Seoul-based currency dealer with Korea Exchange Bank. “China’s manufacturing data is supporting the won as investors see it as key indicator for the global economy.” Yuan Fixing The yuan strengthened the most in almost two weeks after the central bank fixed its reference rate 0.2 percent stronger to a record 6.3425 per dollar, spurring speculation policy makers are favoring currency gains to tame inflation. The currency advanced 0.20 percent to 6.3627 per dollar. “Today’s fixing shows they are maintaining a gradual appreciation to help contain inflation,” said Kenix Lai, a Hong Kong-based foreign-exchange analyst at Bank of East Asia Ltd. Taiwan’s dollar strengthened 0.1 percent to NT$30.118 per dollar, according to Taipei Forex Inc. The island’s jobless rate fell to 4.27 percent in September, the lowest level in three years, the government said yesterday. The median estimate of 10 economists in a Bloomberg News survey was for an unemployment rate of 4.4 percent. Elsewhere, the Philippine peso gained 0.2 percent to 43.167 per dollar, while Indonesia’s rupiah weakened 0.3 percent to 8,868 per dollar and Vietnam’s dong was unchanged at 20,953. To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

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