Asian currencies advanced this week, led by South Korea’s won, as signs the US economy is improving brightened the outlook for the region’s exports.
Stock indices rallied across Asia after US Department of Labor figures showed on Thursday unemployment claims in the world’s largest economy fell by 4,000 to 364,000 in the week ended Dec. 17, the lowest level since April 2008. Moody’s Investors Service said in a statement yesterday that the outlook for South Korea’s ratings remains stable amid geopolitical risks linked to the death of North Korean leader Kim Jong-il.
“Investment sentiment is improving after US data signaled the world’s largest economy is holding out well,” said Hwang Sun-min, a currency trader in Seoul at Kookmin Bank, South Korea’s largest lender. “Moody’s confirmation of sovereign ratings is helping push the won higher. Still, trading is dull as most players are already in holiday mode.”
The won strengthened 0.7 percent this week to 1,150.20 per US dollar as of 5:34pm in Seoul on Friday. Singapore’s dollar and Malaysia’s ringgit made slight gains against the greenback to S$1.2922 and 3.1558, respectively. The Philippine peso climbed 0.8 percent 43.480 and against the US currency.
Moody’s cited South Korea’s “economic strength, as well as high degree of institutional and government financial strengths” as reasons for keeping the nation’s credit ranking stable.
The Bank of Korea and South Korean Ministry of Strategy and Finance said on Friday in a joint statement after a meeting in Seoul that they would try to curb currency volatility and bolster financing for exporters so that they can cope with the global economic slowdown. Financial markets have restored stability after the death of Kim, according to the statement.
The New Taiwan dollar advanced 0.2 percent to NT$30.296 against the greenback this week. The NT dollar extended the week’s gains after President Ma Ying-jeou (馬英九) urged state-owned funds on Thursday to boost investment as the country strives to protect its economy from Europe’s debt crisis. The nation’s Financial Supervisory Commission said this week it would let Chinese banks buy stakes in local lenders and financial holding companies.
China’s yuan climbed for a second week after the People’s Bank of China reiterated it would push forward exchange-rate reform and interest-rate liberalization. The central bank set the yuan’s reference rate 0.07 stronger at 6.3209 on Friday, the highest level since Nov. 9.
The Chinese currency strengthened 0.19 percent this week to 6.3364 per US dollar.
Elsewhere, the Thai baht rose 0.1 percent to 31.29 and Indonesia’s rupiah dropped 0.7 percent to 9,100 against the US dollar. India’s rupee was little changed at 52.765.