The New Taiwan dollar and Philippine peso led gains in Asian currencies this week as China’s exports beat economists’ estimates, boding well for the regional economic recovery and trade.
The yuan rounded out its best week in a month after China’s trade surplus swelled to US$22.9 billion last month as exports and imports surged to records. Malaysia’s ringgit rose for a second week, its best winning streak in two months, after reports showed overseas shipments and manufacturing grew more than analysts had predicted.
“China’s export surprise will mean strong demand for products made in the rest of Asia,” said Julie Yu, a Taipei-based -foreign-exchange trader at Shin Kong Commercial Bank (新光銀行). “Economic growth in the region will continue to support gains in Asian currencies.”
Taiwan’s dollar appreciated 0.5 percent to NT$30.585 against the greenback this week, the peso rose 0.5 percent to 43.675, the ringgit climbed 0.2 percent to 3.1345 and the yuan gained 0.12 percent to 6.6556, according to data compiled by Bloomberg.
The NT dollar advanced for a second week after the government reported on Tuesday that exports increased a better-than-forecast 21.8 percent last month from a year earlier. Consumer prices rose 1.53 percent, the fastest in nine months, data the day before showed.
Global funds bought a total of US$1.3 billion more stocks than they sold in Taiwan, Indonesia, South Korea and Thailand this week, exchange data show. The IMF predicts Asia’s developing economies will expand 9.4 percent this year, while advanced economies will grow 2.7 percent.
South Korea’s won fell 0.4 percent for the week to 1,143.60 per US dollar and Indonesia’s rupiah dropped 0.1 percent to 9,018. India’s rupee was little changed at 45.11 and the Thai baht traded at 30.08 from 30.05 a week earlier.
The US dollar rose the most since September against the euro this week after an agreement to extend and expand tax cuts fueled speculation the US economy will accelerate, driving stocks and Treasury yields higher and boosting demand for greenback-denominated assets.
The US currency strengthened against most of its major counterparts this week as reports showed claims for jobless benefits decreased, exports swelled to a two-year high and consumer sentiment climbed. The euro fell against the greenback after Ireland’s credit rating was downgraded and the region’s political leaders differed about how to contain the debt crisis. The US Federal Reserve holds a policy meeting next week as it continues to buy Treasuries to bolster the economy.
The dollar rose 1.4 percent to US$1.3226 per euro, from US$1.3414 on Dec. 3. It touched US$1.3165 per euro on Thursday, the strongest since Dec. 2. The US currency added 1.7 percent to ￥83.95, from ￥82.53 last week. The euro added 0.3 percent to ￥111.04 from ￥110.73.
The pound gained 1.6 percent this week, and traded at ￡0.8371 per euro on Friday. It was little changed in the week, trading at US$1.5793.
Sterling has gained 0.2 percent in the past month, according to Bloomberg Correlation-Weighted Currency Indexes, which track a basket of 10 developed-country currencies. Since the end of last year, Britain’s currency has lost 3.7 percent, compared with a 9.5 percent decline by the euro.
The pound outperformed the 16-nation euro as the region’s debt crisis boosted demand for UK assets as a haven. The Bank of England this week kept its benchmark interest rate steady at 0.5 percent and held its asset-purchase program unchanged at ￡200 billion.