BLBG:Asia Currencies Strengthen to Three-Month High on U.S. Manufacturing Data
Asian currencies strengthened to a three-month high, led by Indonesia’s rupiah and South Korea’s won, as U.S. manufacturing data added to optimism the world’s largest economy will prop up export demand.
The MSCI Asia-Pacific Index (MXAP) of shares gained for a third day after reports yesterday showed U.S. manufacturing expanded at the fastest pace since June and production gauges in China and India increased in January. Global funds bought $1.3 billion more Indian, South Korean and Taiwanese shares than they sold this week, taking net purchases this year to $9.8 billion, according to exchange data.
“With gains in stocks and good data out of the U.S., risk sentiment is improving,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo. “We will probably see some more fund inflows into the region for now, supporting Asian currencies.”
The rupiah surged 1.2 percent to 8,883 per dollar as of 9:29 a.m. in Jakarta, according to prices from local banks compiled by Bloomberg. The won climbed 0.7 percent to 1,118.30, Malaysia’s ringgit jumped 0.7 percent to 3.0220 and the Taiwan dollar advanced 0.6 percent to NT$29.514. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most active currencies excluding the yen, rose for a third day, reaching a three-month high.
The U.S. Institute for Supply Management’s index climbed to 54.1 in January from a revised 53.1 in December. China’s purchasing managers’ index increased to 50.5 last month from 50.3 in December while HSBC Holdings Plc and Markit Economics said India’s index rose to 57.5 from 54.2.
Korean Stocks Jump
The rupiah strengthened for a third day after a report yesterday showed inflation eased for a fifth month. Global investors held 236 trillion rupiah ($26.5 billion) of government bonds as of Jan. 31, up 5.9 percent from end-2011, finance ministry data show.
The won reached the strongest level since November as the Kospi (KOSPI) Index of equities jumped 1.2 percent. South Korea’s foreign-exchange reserves increased by $4.94 billion to $311.3 billion at the end of January from a month earlier as the euro and British pound strengthened against the dollar, the Bank of Korea said today.
“Improving global economic data is supporting the won,” said Jeon Seung Ji, a Seoul-based currency analyst at Samsung Futures Inc. “The won didn’t fall much yesterday even after South Korea’s trade balance turned out to be a deficit, and this signals the market is tilted toward some risk-taking.”
Risk Appetite Improving
The ringgit advanced to a four-month high after data showed global funds added to holdings of the nation’s bonds last year. International investors raised their ownership of ringgit- denominated debt by 36 percent in 2011 to 164.5 billion ringgit ($54.4 billion), Bank Negara Malaysia said on its website on Jan. 31. The central bank left its benchmark interest rate unchanged at 3 percent at a review this week.
“Risk appetite is gradually improving,” said Akira Banno, a treasury adviser at Bank of Tokyo-Mitsubishi UFJ Bhd. in Kuala Lumpur. “Given the stable interest-rate environment in Malaysia, more foreign funds are expected to return.”
Elsewhere, the Philippine peso advanced 0.6 percent to 42.695 per dollar and the Thai baht added 0.3 percent to 30.90. China’s yuan strengthened 0.12 percent to 6.2990.
To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
