BLBG:Rupee Leads Gains In Asian Currencies This Week On Global Easing
India’s rupee led gains in Asian currencies this week on optimism central banks in the world’s biggest economies will boost efforts to arrest a global slump.
The People’s Bank of China and the European Central Bank lowered interest rates yesterday and the Bank of England expanded a bond-purchase program. Global funds pumped $461 million into the Indonesian, Philippine and South Korean stock markets this week through yesterday, exchange data show. The peso reached a four-year high as Standard & Poor’s upgraded the debt rating for the Philippines. The yuan fell on speculation China will favor a weaker currency to support exports.
“Developing nations are in an easing mode while this region’s economic condition is better than other areas,” said Kozo Hasegawa, a Bangkok-based trader at Sumitomo Mitsui Banking Corp. “So fund inflows into the region were supporting the currencies. There remain uncertain factors with Europe’s debt crisis lingering.”
The peso gained 0.9 percent from a week ago to 41.805 per dollar as of 11:05 a.m. in Manila, according to Tullett Prebon Plc. South Korea’s won advanced 0.6 percent to 1,138.80 and Thailand’s baht rose 0.3 percent to 31.64, according to data compiled by Bloomberg. The rupee climbed 1.2 percent to 54.9550 as of yesterday’s close. The yuan dropped 0.18 percent, the biggest five-day loss in a month, to 6.3656. Ten of the 11 most- traded Asian currencies declined today.
Rating Upgrade
China cut the one-year lending and deposit rates after two local manufacturing indexes fell last month. Services output shrank in June for a fifth month in the euro area, unexpectedly contracted in Germany and grew less than forecast in the U.K., reports showed this week. The U.S. Institute for Supply Management said yesterday its non-manufacturing index dropped to 52.1 in June, the lowest level since January 2010.
The rupee touched its strongest level since May as global funds bought $855 million more Indian stocks than they sold in the first three days of the week, set for the biggest weekly net purchases since the period ended on March 16, eccosting to exchange data.
The peso headed for a second weekly advance as the Philippines’s long-term foreign currency-denominated debt was upgraded one level to BB+ from BB by S&P this week. That’s one step below investment grade and and the highest since 2003.
The won was poised for a sixth week of appreciation, the longest winning streak since October 2010, as overseas investors bought $182 million more Korean stocks than they sold in the last four days.
Samsung’s Record Profit
Samsung Electronics Co. (005930), South Korea’s biggest exporter, posted a record quarterly profit today that beat analyst estimates as surging sales of Galaxy smartphones helped it challenge Apple Inc.’s iPhone. Operating profit totaled 6.7 trillion won ($5.9 billion) in the second quarter, a 79 percent jump from a year earlier, the company said.
“Foreign money keeps flowing into Korean stocks and this, coupled with demand from exporters, pushed the won higher this week,” said Lee Jung Hyun, a currency dealer at state-run Industrial Bank of Korea (024110) in Seoul. “The market’s reaction to China’s rate cut is muted with traders largely keeping a nervous eye on what’s going on in Europe.”
The yuan weakened 0.16 percent today in Shanghai, the most since May 31, according to the China Foreign Exchange Trade System. The PBOC lowered the reference rate by 0.09 percent to 6.3249. The currency is allowed to trade as much as 1 percent on either side of the daily fixing.
Yuan Outlook
“The yuan’s outlook will be obviously even dimmer given the recognition of a softer domestic economy and a stronger dollar,” said Andy Ji, a Singapore-based strategist at Commonwealth Bank of Australia (CBA), the most-accurate forecaster of the Chinese currency in the past six quarters. Ji said in a separate interview this week that he’s currently reviewing forecasts for the yuan and will probably trim estimates as he expected the PBOC to curb gains.
Elsewhere, Indonesia’s rupiah rose 0.3 percent from a week ago to 9,415 per dollar, while Malaysia’s ringgit slid 0.1 percent to 3.1717. Taiwan’s dollar and Vietnam’s dong were little changed at NT$29.913 and 20,885, respectively.
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.
