Asian currencies strengthened this week by the most in more than two years, led by South Korea’s won, after European leaders agreed measures to tackle a debt crisis that drove investors from emerging-market assets.
The Bloomberg-JPMorgan Asia Dollar Index and the MSCI Asia- Pacific Index of shares were headed for their biggest weekly gains since May 2009, after a report yesterday showed the U.S. economy grew at the fastest pace in a year in the third quarter. Overseas investors pumped more than $1.5 billion into equities in South Korea, Taiwan and Thailand in the last four days, exchange data show. The won rose to a six-week high, supported by a widening current-account surplus.
“There’s definitely progress and that’s what the market is cheering about, especially when expectations were very low to begin with,” said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd. “The risk rally will likely linger in the short term.”
The won completed a 3.9 percent gain this week to 1,104.88 per dollar in Seoul, according to data compiled by Bloomberg. The Singapore dollar strengthened 2.8 percent to S$1.2432, Malaysia’s ringgit gained 2.6 percent to 3.0713 and the Thai baht advanced 1.5 percent 30.55. Taiwan’s dollar appreciated for a fourth week, rising 1.4 percent to NT$29.869.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks Asia’s 10 most-traded currencies excluding the yen, climbed 1.5 percent and the MSCI Asia-Pacific Index rallied 7.4 percent.
China Support
European leaders agreed to expand a bailout fund to $1.4 trillion and persuaded bondholders to take 50 percent losses on Greek debt yesterday. French President Nicolas Sarkozy said China will “cooperate closely” to ensure the Group of 20 will contribute to the enlarged fund, while a person familiar said Japan plans to support the increase.
The won touched a six-week high of 1,100.70 today after the Bank of Korea said the current-account surplus jumped to $3.1 billion in September, from $293 million in August. It last recorded a deficit in February 2010.
“The won will try to strengthen to near 1,090 per dollar, which was the level from which the currency started weakening,” said Kim Doo Hyun, a senior currency dealer at Korea Exchange Bank in Seoul. “Korea has posted current-account surpluses for 19 months, which is also positive for the won.”
Taiwan’s dollar breached the NT$30 level for the first time in a month and the ringgit was set for its biggest weekly since December 2008.
“Some of these downside risks for the ringgit have been mitigated by the better-than-expected U.S. data and the euro- zone summit outcome,” said Sim at Bank of Singapore.
U.S. Growth
The U.S. economy grew at an annualized pace of 2.5 percent last quarter, the Commerce Department said yesterday, matching the median estimate in a Bloomberg News survey. The department may say today consumer spending rose 0.6 percent last month versus 0.2 percent in August, according to a separate survey.
China’s yuan appreciated 0.5 percent to 6.3510 in Shanghai for its best week in more than two months, according to China Foreign Exchange Trade System. The central bank set its daily reference rate 0.29 percent higher at a record 6.3290 today, the biggest increase since November.
“The record fixing shows China’s determination to tackle inflation as a stronger currency can lower import costs,” said Kenix Lai, a Hong Kong-based foreign-exchange analyst at Bank of East Asia Ltd. “Market sentiment got a boost after Europe reached an accord.”
The Philippine peso advanced 1.9 percent to 42.62 per dollar, its best performance since December 2009. Indonesia’s rupiah rose 0.3 percent to 8,837 and India’s rupee strengthened 2.5 percent to 48.81, recouping all of the slump last week to a 2 1/2-year low.
bloomberg
The Bloomberg-JPMorgan Asia Dollar Index and the MSCI Asia- Pacific Index of shares were headed for their biggest weekly gains since May 2009, after a report yesterday showed the U.S. economy grew at the fastest pace in a year in the third quarter. Overseas investors pumped more than $1.5 billion into equities in South Korea, Taiwan and Thailand in the last four days, exchange data show. The won rose to a six-week high, supported by a widening current-account surplus.
“There’s definitely progress and that’s what the market is cheering about, especially when expectations were very low to begin with,” said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd. “The risk rally will likely linger in the short term.”
The won completed a 3.9 percent gain this week to 1,104.88 per dollar in Seoul, according to data compiled by Bloomberg. The Singapore dollar strengthened 2.8 percent to S$1.2432, Malaysia’s ringgit gained 2.6 percent to 3.0713 and the Thai baht advanced 1.5 percent 30.55. Taiwan’s dollar appreciated for a fourth week, rising 1.4 percent to NT$29.869.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks Asia’s 10 most-traded currencies excluding the yen, climbed 1.5 percent and the MSCI Asia-Pacific Index rallied 7.4 percent.
China Support
European leaders agreed to expand a bailout fund to $1.4 trillion and persuaded bondholders to take 50 percent losses on Greek debt yesterday. French President Nicolas Sarkozy said China will “cooperate closely” to ensure the Group of 20 will contribute to the enlarged fund, while a person familiar said Japan plans to support the increase.
The won touched a six-week high of 1,100.70 today after the Bank of Korea said the current-account surplus jumped to $3.1 billion in September, from $293 million in August. It last recorded a deficit in February 2010.
“The won will try to strengthen to near 1,090 per dollar, which was the level from which the currency started weakening,” said Kim Doo Hyun, a senior currency dealer at Korea Exchange Bank in Seoul. “Korea has posted current-account surpluses for 19 months, which is also positive for the won.”
Taiwan’s dollar breached the NT$30 level for the first time in a month and the ringgit was set for its biggest weekly since December 2008.
“Some of these downside risks for the ringgit have been mitigated by the better-than-expected U.S. data and the euro- zone summit outcome,” said Sim at Bank of Singapore.
U.S. Growth
The U.S. economy grew at an annualized pace of 2.5 percent last quarter, the Commerce Department said yesterday, matching the median estimate in a Bloomberg News survey. The department may say today consumer spending rose 0.6 percent last month versus 0.2 percent in August, according to a separate survey.
China’s yuan appreciated 0.5 percent to 6.3510 in Shanghai for its best week in more than two months, according to China Foreign Exchange Trade System. The central bank set its daily reference rate 0.29 percent higher at a record 6.3290 today, the biggest increase since November.
“The record fixing shows China’s determination to tackle inflation as a stronger currency can lower import costs,” said Kenix Lai, a Hong Kong-based foreign-exchange analyst at Bank of East Asia Ltd. “Market sentiment got a boost after Europe reached an accord.”
The Philippine peso advanced 1.9 percent to 42.62 per dollar, its best performance since December 2009. Indonesia’s rupiah rose 0.3 percent to 8,837 and India’s rupee strengthened 2.5 percent to 48.81, recouping all of the slump last week to a 2 1/2-year low.
bloomberg
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