Asian currencies had their biggest weekly gain of the year, led by the Philippine peso and Thailand’s baht, as upbeat economic data fanned speculation interest rates will be raised to counter inflation.
The Bloomberg-JPMorgan Asia Dollar Index climbed after Taiwan and the Philippines announced faster economic growth than economists forecast this week, with the Philippines also reporting a higher-than-expected inflation rate. Exports and consumer prices gained more than forecast in South Korea and Indonesia, while overseas sales in Malaysia also exceeded projections, separate data showed. Bank Indonesia unexpectedly raised interest rates on Friday for the first time in two years.
“Asian economic growth is very solid and they are in an environment allowing central banks to boost rates to fight inflation,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co in Tokyo. “The trend of Asian currency appreciation is still intact.”
The Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, climbed 0.5 percent this week to 116.42.
The Philippine peso advanced 0.8 percent to 43.765 per US dollar, the baht strengthened 0.8 percent to 30.81 and Indonesia’s rupiah rose 0.4 percent to 8,993.
The peso had a second weekly gain as a government report on Friday showed consumer prices climbed 3.5 percent last month from a year earlier, the most in four months and more than the median 3.3 percent gain forecast in a Bloomberg survey of economists. GDP rose 7.3 percent last year, the fastest growth since 1976, the government reported on Monday.
Indonesia’s rupiah reached its strongest level in four weeks on Friday after Bank Indonesia boosted its reference rate by a quarter of a percentage point to 6.75 percent. Inflation in Southeast Asia’s biggest economy accelerated to a 21-month high of 7.02 percent last month, official figures show.
India’s rupee strengthened 0.4 percent this week to 45.59 per dollar. The statistics office will predict economic growth of 8.6 percent for the fiscal year ending March 31, according to the median estimate of economists surveyed by Bloomberg ahead of an announcement tomorrow. A -report on -Tuesday showed exports climbed 36.4 percent in December from a year earlier, the biggest increase since March last year.
Financial markets in Taiwan, China and South Korea were shut most of this week for the Lunar New Year holidays.
The New Taiwan dollar strengthened on Tuesday on speculation exporters were repatriating income ahead of the Lunar New Year holiday that began on Wednesday. The local currency market will reopen on Tuesday.
The NT dollar closed 0.3 percent stronger at NT$29.200 against its US counterpart at 4pm on Tuesday, according to Taipei Forex Inc.
The South Korean won fell 0.3 percent to close at 1,116.95 per US dollar on Tuesday, the last trading day of the week in Seoul.
Financial markets in Singapore and Malaysia were shut for the Lunar New Year holidays on Thursday and Friday. The Singapore dollar strengthened 0.6 percent to S$1.2734 per US dollar before the break, according to data compiled by Bloomberg. Malaysia’s ringgit added 0.5 percent to 3.04 over the same period.
The US dollar advanced for a third day against the euro and yen in the longest stretch of gains in four weeks after the US jobless rate fell to the lowest level since April 2009 even as winter storms limited gains in payrolls.