Asian currencies rose this week, led by Malaysia’s ringgit and Singapore’s dollar, on optimism the global recovery is intact after the US economy grew more than estimated in the third quarter.
“Some players are positioning themselves for the next year,” said Mirza Baig, a Singapore-based currency strategist at Deutsche Bank AG, the world’s largest foreign-exchange trader. “Generally, everybody’s theme is that Asian currencies will do well next year.”
The Bloomberg-JPMorgan Asia Dollar Index gained 0.5 percent this week, the most since the five-day period ended Dec. 3, to 115.14 in Hong Kong.
The ringgit rose 1.2 percent to 3.0930 per US dollar, the Singapore dollar appreciated 0.8 percent to S$1.3004 and India’s rupee advanced 0.5 percent to 45.115, according to data compiled by Bloomberg.
The ringgit climbed for a fourth straight day on optimism Malaysia’s growth outlook will spur global funds to add to holdings of local assets. The nation’s economy will expand 6.7 percent this year, the most since 2004, and 5.3 percent next year, the IMF forecast on Oct. 6.
“People are talking about how good this year has been and how well the economy is going to do next year,” said Mohd Zaki Talib, a currency trader at RHB Bank Bhd in Kuala Lumpur.
China’s yuan advanced 0.4 percent this week to 6.6270 per dollar. The premium to buy the currency outside China disappeared after Hong Kong’s central bank said it will set up a fund to ensure supply of the currency for cross-border trade settlement.
Taiwan’s dollar ended Friday unchanged at NT$30.485 against its US counterpart at the 4pm close, according to Taipei Forex Inc. It reached NT$29.670 earlier, the strongest level since October 1997.
The Taiwanese currency had closed at NT$30.51 against the greenback on Dec. 17.
The euro fell for a third-straight week against the US dollar as a slew of credit-rating downgrades fueled concern some nations will be unable to pay their debts.
The common currency slipped against 14 of its 16 most actively traded peers in the week as the region’s leaders remained divided on how to tackle a crisis that has resulted in Greece and Ireland turning to the EU and IMF for bailouts. The Swiss franc appreciated to a euro-era record as investors sought a haven from the European debt crisis.
The euro dropped 0.5 percent to US$1.3109 as of 1:33pm on Friday in London. It touched US$1.3055 on Thursday, the lowest level since the start of the month. The shared currency fell 1.8 percent to ￥108.73, from ￥110.77.
The US dollar slipped against 12 of its 16 most actively traded peers amid burgeoning confidence about the global economic recovery.
The Japanese currency gained the most this week in a month against the euro, jumping 1.8 percent to ￥108.77. It climbed 1.3 percent to ￥82.9 per US dollar.
The pound was little changed at US$1.5440 as of 12:40pm in London, a decline of 0.7 percent from US$1.5533 on Dec. 17. It reached US$1.5356 on Wednesday, its weakest level since Sept. 14. The British currency was at ￡0.8505 per euro from ￡0.8491 a week ago.