Asian currencies had a third weekly gain, led by India’s rupee and South Korea’s won, as signs of a global economic recovery and falling European borrowing costs boosted demand for emerging-market assets.
The won reached a six-week high as reports this week showed China’s fourth-quarter GDP expanded more than forecast, remittances by Philippine citizens abroad increased at a faster pace and claims for US jobless benefits dropped to the lowest level in almost four years.
Global funds poured a net US$2.9 billion into South Korean and Indonesian equities this week through Jan. 20 and US$485 million into India in the first three days of the week, exchange data show.
“There’s some optimism over the US and Chinese economic conditions, while Europe’s debt concern is at least not worsening,” said Kozo Hasegawa, a trader at Sumitomo Mitsui Banking Corp in Bangkok. “That led to some fund inflows into Asia, supporting currencies. However, Europe’s problem won’t be solved anytime soon and so sentiment may not recover sharply.”
The New Taiwan dollar dropped 0.2 percent on Friday, snapping a three-day gain, as government reports showed that factory output and export orders fell more than economists estimated.
The NT dollar was little changed for the week at NT$29.99 against its US counterpart, according to Taipei Forex Inc. It touched NT$29.86 on Friday, the strongest level since Oct. 31. The country’s stock and bond markets are closed through Jan. 27 for the Lunar New Year holidays.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks 10 most-traded currencies in the region excluding the yen, climbed 0.6 percent from a week ago to 116.18.
The three-week run of gains is the first since June. The rupee climbed 2.4 percent to 50.3350 per US dollar, the won surged 1.3 percent to 1,134.21 and Malaysia’s ringgit rose 0.9 percent to 3.1042, according to data compiled by Bloomberg. The Philippine peso added 1.1 percent to 43.263.
The won gained for a fourth day, its longest run of appreciation in seven weeks. Data on Jan. 18 showed South Korea’s department store sales increased 11 percent, the most in eight months.
The ringgit climbed for a third week and the rupiah jumped 1.5 percent this week to 8,945 per US dollar as Indonesia attained an investment-grade credit rating from Moody’s Investors Service on Jan. 18.
“Risk appetite is the driving factor for Asian currencies,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd in Singapore. “Attention is more on the good data coming out of the US market, sending the focus away from the debt crisis in Europe.”
The rupiah touched a two-month high on Friday after foreign funds bought US$226 million more local shares than they sold in the week, exchange data show.
China’s yuan dropped 0.5 percent this week, the most in about a year, to 6.3390, amid speculation policy makers would limit appreciation to protect exporters as global economic growth slows. The financial crisis is deepening, the Xinhua news agency reported on Friday, citing comments made by Chinese Premier Wen Jiabao (溫家寶) while visiting Chinese citizens in Qatar.
The Thai baht gained 0.8 percent to 31.54 per US dollar.