Sun, Dec 05, 2010 - Page 10 News List

Growth outlook boosts inflows, Asia currencies

REGIONAL GROWTH:A 2.9% rise has made the NT dollar the best performer in Asia outside Japan this quarter. Meanwhile, the euro rose on ECB moves

Bloomberg

Asian currencies advanced this week, led by the biggest five-day gain in South Korea’s won in two months, as reports on manufacturing signaled regional growth.

The Bloomberg-JPMorgan Asia Dollar Index strengthened 1.1 percent for the week to 115.30. South Korea’s won appreciated 1.9 percent to 1,138.55, according to data compiled by Bloomberg. India’s rupee climbed 1.6 percent to 45.1060 and the Singapore dollar added 1.1 percent to S$1.3059.

Expansion in factory production accelerated in China, South Korea, Taiwan and Singapore over the past two months, official data showed this week, bolstering the outlook for Asian exporters. The IMF forecasts the region’s economies will expand at a faster pace than developed nations this year.

“Some good data support risk appetite,” said Minori Uchida, senior analyst in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd. “Asian growth is solid and currencies will continue to strengthen, but probably at a slower pace than this year.”

The New Taiwan dollar rose this week on speculation the central bank will tolerate appreciation after Governor Perng Fai-nan (彭淮南) said the bank would allow greater flexibility in the currency.

The NT dollar climbed 0.3 percent to NT$30.745 against its US counterpart this week, according to Taipei Forex Inc. The currency was trading 1.6 percent stronger a minute before Friday’s close and then pared gains to 0.1 percent on suspected central bank intervention. It reached NT$30.015 on Nov. 12, the strongest level since March 2008.

The NT dollar has advanced 2.9 percent so far this quarter, the best performance among Asian currencies outside Japan. The currency has climbed 5.5 percent this year, lagging the Thai baht’s 10.7 percent gain, the Malaysian ringgit’s 8.7 percent rise and the 7.2 percent appreciation in the Singapore dollar.

Elsewhere this week, the Philippine peso advanced 0.8 percent to 43.895 per US dollar and the Thai baht gained 0.5 percent to 30.05. The Chinese yuan climbed 0.1 percent to 6.6633 and Indonesia’s rupiah was little changed from Nov. 26 at 9,009.

The euro rose against the US dollar for the first week in a month as the European Central Bank (ECB) moved to curb the spread of the sovereign-debt crisis and economic data in China and Europe fueled demand for higher-yielding assets.

The euro strengthened 1.3 percent to US$1.3414 on Friday, the first increase since the five days ended Nov. 5, from US$1.3242 on Nov. 26. It touched US$1.2969 on Tuesday, the lowest level since Sept. 15. The shared currency fell 0.6 percent to ¥110.73, from ¥111.37.

The yen gained against the US dollar for the first time in five weeks, advancing 1.9 percent to ¥82.53, the strongest level since Nov. 15. It closed at ¥84.10 on Nov. 26.

The pound posted its first weekly gain against the US dollar, although it declined against the euro.

Sterling appreciated 1 percent to US$1.5752 at 5:24pm in London, a weekly gain of 1 percent. It weakened 0.3 percent to £0.8494 per euro, little changed over the week.

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