The New Taiwan dollar posted a weekly gain after data showed export orders and industrial production last month rose more than economists forecast, adding to signs economic growth is on track.
The currency snapped a two-week decline as the MSCI Asia-Pacific Index of shares climbed on Friday after EU leaders pledged to stabilize the euro-area economy, vowing to stave off a Greek default as long as Greek Prime Minister George Papandreou pushes through a package of budget cuts next week. Factory output increased 7.8 percent last month from a year earlier, compared with the median estimate of 5.9 percent in a Bloomberg survey, a report showed on Thursday.
The local data “is good news for Taiwan’s economy and sends positive signs that trade within the Asian region is still healthy,” said Christopher Gothard, head of foreign exchange at Brown Brothers Harriman (Hong Kong) Ltd. “This market continues to be dominated by comments and news leaking out from the European situation.”
The NT dollar advanced 0.1 percent over the week to NT$28.962 against its US counterpart as of the 4pm close, according to Taipei Forex Inc. The currency declined 0.1 percent from Thursday.
ASIA
Asian currencies completed a weekly decline as concern that Greece will default and a cut to the growth outlook for the world’s largest economy damped demand for emerging-market assets.
The US Federal Reserve said on Thursday the US economy will expand 2.7 percent to 2.9 percent this year, down from April’s forecast of 3.1 percent to 3.3 percent. European Central Bank President Jean-Claude Trichet said on Wednesday risk signals for financial stability in the euro area are flashing “red” as Greece’s debt crisis threatens to infect banks. Overseas investors pulled US$360 million from South Korean, Taiwanese and Thai equities in the first four days of the week.
“Uncertainty on the global growth outlook remains,” said Prakriti Sofat, a Singapore-based economist at Barclays Capital. “I think the next point to watch will be June 28 when we have the Greek parliament looking to pass the privatization program.”
Thailand’s baht dropped 0.4 percent for the week to 30.68 per US dollar as of 3:24pm on Friday in Bangkok. India’s rupee declined 0.3 percent to 44.985, Malaysia’s ringgit slipped 0.4 percent to 3.0430 and Indonesia’s rupiah weakened 0.1 percent to 8,603.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, dropped 0.2 percent.
South Korea’s won completed its biggest weekly advance since April as the MSCI Asia-Pacific Index of regional equities gained 1.2 percent on Friday. The currency strengthened 0.7 percent for the week to 1,078.75 per US dollar.
Elsewhere, the Singapore dollar declined 0.1 percent for the week to S$1.2361 against its US counterpart. The Philippine peso climbed 0.6 percent to 43.417, and China’s yuan was little changed at 6.4745.
EUROPE
In Europe, the British pound posted a fourth weekly decline against the US dollar amid speculation that the Bank of England will keep interest rates at a record low to counter faltering growth.
The pound dropped 1.3 percent from the previous week to US$1.5985 as of 4:58pm in London on Friday. Sterling weakened 0.4 percent to £0.8876 per euro and declined 0.9 percent to ¥128.41.
The Swiss franc rose against all of its 16 most-traded peers, reaching a record against the euro, as investors sought safety on concern an austerity plan to stabilize Greece won’t resolve Europe’s sovereign-debt crisis.
The US dollar gained for a third week against the euro, the longest since February, on speculation Greece’s parliament may reject Papandreou’s plan to cut the budget deficit, win more aid and avoid default. The pound slid for a fourth week against the dollar after UK policymakers discussed more monetary stimulus. Growth in US manufacturing cooled this month, a report next week may show.
“All these headlines continue to add to uncertainty and nervousness amongst investors and continue to create the choppy price action that we’ve been seeing,” said Paresh Upadhyaya, head of Americas G10 currency strategy at Bank of America Corp in New York. “Just as you feel you’re on top of the Greek situation, you get thrown a curve ball.”
The Swiss franc touched 1.1806 versus the euro on Friday, the strongest level since the shared currency’s 1999 debut. It gained 2.6 percent for the week to SF1.1826 per euro, from SF1.2142 on June 17. It gained 1.8 percent to SF0.8331 per US dollar, from SF0.8482 a week earlier.
The greenback appreciated 0.8 percent to US$1.4188 against the euro, from US$1.4306. The US currency rose 0.5 percent against the yen to 80.43, from 80.05, gaining for the first time in five weeks. The euro fell 0.3 percent to ¥114.13 in its third week of losses, the longest losing streak since January.
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