BLBG:Asian Currencies at Two-Week High on China Manufacturing Boost
Asian currencies rose to the highest level in almost two weeks after Chinese manufacturing data beat economists’ forecasts, brightening the outlook for regional exports to the world’s second-largest economy.
The Bloomberg-JPMorgan Asia Dollar Index added to its best quarter since 2010 as South Korea’s won completed its biggest back-to-back rally in a month. China’s Purchasing Managers’ Index climbed to a one-year high of 53.1 in March from 51 the previous month, exceeding the 50.8 median forecast in a Bloomberg survey of economists, a report yesterday showed.
“The PMI data shows China’s domestic demand is relatively strong,” said Sean Yokota, a Singapore-based currency strategist at UBS AG. “For Asian currencies, that’s positive because if China’s domestic demand is strong, Asia’s exports to China will be slightly better.”
The won advanced 0.5 percent to 1,127.88 per dollar at the close in Seoul, according to data compiled by Bloomberg. The Philippine peso climbed 0.5 percent to 42.69, Malaysia’s ringgit strengthened 0.3 percent to 3.0497gv and Taiwan’s dollar added 0.1 percent to NT$29.506.
The Asia Dollar Index (ADXY), which tracks the region’s 10 most- used currencies excluding the yen, reached 117.08, the highest level since March 20. The gauge’s 60-day historical volatility fell to 3.36 percent from 3.42 percent on March 30. China is the biggest export market for Malaysia, Taiwan and South Korea.
U.S. Reports
The MSCI Asia-Pacific Index (MXAP) of shares rallied for a second day as stock exchange data showed foreign investors bought $27.5 billion more equities than they sold in India, South Korea, Taiwan, Indonesia and Thailand this year.
A report today may show U.S. manufacturing grew in March, based on a survey by the Institute for Supply Management. Payrolls in the world’s largest economy increased by more than 200,000 for a fourth month, according to a Bloomberg survey before Labor Department data due April 6.
The won reached its strongest level in more than a week after the government reported yesterday a trade surplus of $2.3 billion in March, up from $1.5 billion in February. That is “supportive for the currency,” said Byeon Ji Young, a Seoul- based analyst at Woori Futures Co.
The currency sustained gains after Moody’s Investors Service raised the outlook on the nation’s credit rating to positive from stable today, citing strong and improving fiscal fundamentals. South Korea is ranked A1, the company’s fifth-best investment grade.
Indonesia’s rupiah fell after President Susilo Bambang Yudhoyono failed to get a fuel-price increase through parliament last week, signaling weakening support in his ruling coalition. A government report today showed inflation accelerated to 3.97 percent last month, compared with 3.56 percent in February. The currency lost 0.1 percent to 9,170 per dollar.
Thailand’s baht rose 0.1 percent to 30.81 against the greenback. A private report today showed consumer confidence rose for a fourth month in March amid recovery efforts after last year’s floods, which were the worst in more than 70 years.
Elsewhere, China’s yuan rose 0.13 percent to 6.2980 per dollar in Hong Kong’s offshore market. Onshore financial markets in China and Vietnam are closed for public holidays. There was no trading in India’s rupee as banks closed their accounts for the March 31 fiscal year-end.
To contact the reporters 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
