South Korea’s won and Malaysia’s ringgit led gains in Asian currencies as better-than-expected U.S. housing figures brightened the outlook for exports and a rally in global stocks fanned demand for riskier assets. The Bloomberg-JPMorgan Asia Dollar Index touched a 14-year high and the MSCI Asia-Pacific Index of shares climbed by the most in a week. Data today are forecast to show Taiwan’s export orders gained in June and Malaysia’s inflation accelerated to a two-year high, according to Bloomberg surveys of economists. The Standard & Poor’s 500 Index jumped 1.6 percent yesterday, the most in four months, and futures tied to the U.S. stock gauge were 0.3 percent higher as of 10:22 a.m. in Hong Kong. “Gains in stocks are improving risk sentiment and boost demand for Asia’s higher-yielding assets,” said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo. “Asia has advantages from both a yield and growth perspective.” The won climbed 0.4 percent to 1,055.35 per dollar, the most in a week, according to data compiled by Bloomberg. The ringgit advanced 0.3 percent to 2.9970 and the Philippine peso added 0.2 percent to 42.747. Thailand’s baht climbed 0.2 percent to 29.86, earlier touching a two-month high of 29.85. Central banks in China, India, South Korea, Indonesia, Taiwan, Malaysia, Thailand and the Philippines all boosted borrowing costs this year, while counterparts in the U.S. and Japan kept benchmark rates at a maximum 0.25 percent. Developing economies in Asia will expand 8.4 percent in 2011, outpacing growth of 2.5 percent in the U.S. and 2.0 percent in countries using the euro, according to International Monetary Fund estimates released last month. U.S. Housing Starts The won traded near a three-year high of 1,054.10 per dollar, reached last week, after data showing a pickup in U.S. housing starts damped concern a recovery in the world’s largest economy is losing steam. The currency was also buoyed by speculation policy makers will favor appreciation to stem gains in living costs. President Lee Myung Bak will hold a Cabinet meeting today to discuss measures to tackle inflation, Yonhap News reported yesterday. “Strength in the won is gathering pace now with some positive newsflow,” said Yu Won Jun , a Seoul-based currency dealer at Korea Exchange Bank. “And the market isn’t as vigilant about intervention after the presidential Blue House expressed concern over inflation.” U.S. Deficit Deal The ringgit advanced to its highest level in a week. A report due at 5 p.m. local time is expected to show inflation accelerated to 3.6 percent in June, the fastest pace since March 2009, according to the median estimate of economists surveyed by Bloomberg News. U.S. President Barack Obama yesterday endorsed a $3.7 trillion debt-cutting plan that would combine tax increases and spending cuts, boosting global stock markets. “Risk appetite has increased as people like the idea of the budget cut in the U.S.,” said Akira Banno, a treasury adviser in Kuala Lumpur at Bank of Tokyo-Mitsubishi UFJ Bhd. “The ringgit could stay firm against the greenback given the rally in regional stock markets.” Taiwan’s dollar rose for a second day, gaining 0.1 percent to NT$28.879. A report today is expected to show export orders advanced 10.1 percent in June from a year earlier, after an increase of 11.5 percent the previous month, according to the median estimate of economists in a Bloomberg poll. Elsewhere, Singapore’s dollar gained 0.2 percent to S$1.2143 against the greenback and the Indonesian rupiah appreciated 0.1 percent to 8,538, according to data compiled by Bloomberg. China’s yuan advanced 0.1 percent to 6.4573. 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

Source