Sun, Jul 15, 2007 - Page 10 News List

Regional currencies gain as rally draws investors

BLOOMBERG

Asian currencies rose, paced by the Philippine peso and Indonesia's rupiah, as a regional stock rally signaled increased demand for emerging-market assets.

Investors sold yen to buy higher-yielding currencies in so-called carry trades, said Catherine Tan, head of emerging markets at Forecast Singapore Ltd.

A surge in US stocks on July 12 eased concern a housing slump will stunt export-led economic growth in Asia from one of the region's biggest overseas markets.

"Stocks rose so much and risk appetite came back, helping Asian currencies strengthen," Tan said. "Currencies against the yen also surged. Everyone's very bullish."

The US dollar lost ground against the New Taiwan dollar on the Taipei Foreign Exchange on Friday, decreasing NT$0.031 to close at NT$32.762.

The rupiah on Friday climbed 0.3 percent to 9,028 against the dollar in Jakarta, data compiled by Bloomberg show. The peso gained 0.5 percent to 45.755, according to data from Tullett Prebon Plc, the world's second-largest inter-dealer broker.

The Philippine currency also rose after the central bank allowed higher interest rates on large-deposit accounts, while lowering its benchmark borrowing cost. Thailand's baht had its biggest weekly gain since January, climbing for the 12th day, on speculation measures to curb the currency's advance will take time to be effective.

The Morgan Stanley Capital International Asia-Pacific Index, a regional equity benchmark, advanced 1.5 percent to an all-time high late in Asia on Friday.

South Korea's won strengthened 0.2 percent to 916.90, reaching the highest since December and bringing the week's gain to 0.3 percent, according to Seoul Money Brokerage Services Ltd. The KOSPI index of shares climbed to a record.

In Thailand, the baht rose 0.2 percent to 33.25 in onshore trading, the highest in almost a decade, and climbed 1 percent to 30.60 offshore.

Elsewhere in Asia, the Singapore dollar gained 0.1 percent to S$1.5146. The Vietnamese dong was little changed at 16,135.

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