Most Asian currencies strengthened this week, with the Thai baht climbing to a five-month high, as upbeat US economic data and monetary easing in China spurred demand for riskier assets.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, rose 0.1 percent, and the MSCI Asia Pacific Index of shares climbed to a six-month high. Demand for higher-yielding assets was also buoyed by European leaders’ approval of a second bailout for Greece on Tuesday. Chinese banks’ reserve requirements were relaxed on Friday for the second time in three months.
“Good data out of the US leads to speculation external demand will improve, and that’s good for export-oriented economies like Malaysia and Thailand,” said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc in Tokyo. “Fund inflows are supporting the currencies. Risk sentiment is also good after agreement was reached on Greece bailout.”
The New Taiwan dollar snapped a three-day decline on Friday on optimism an economic recovery in the US would boost exports and spur growth. Friday’s 0.1 percent gain helped the NT dollar close the week little changed at NT$29.582, from the previous week’s NT$29.583.
The Taiwanese currency may gain as the nation’s “growth outlook appears brighter now,” Wai Ho Leong and Joey Chew, Singapore- based analysts at Barclays Capital, wrote in a research note. “The improvement in US economic indicators is finally filtering down to Taiwan.”
The baht advanced 1.3 percent this week to 30.38 per US dollar in Bangkok, according to data compiled by Bloomberg. Malaysia’s ringgit climbed 0.8 percent to 3.0138 and India’s rupee gained 0.7 percent to 48.9450. China’s yuan strengthened 0.02 percent to 6.2978.
Stock markets in South Korea, India and the Philippines attracted US$1.4 billion from overseas this week, according to the latest exchange data. In Thailand, global funds boosted their holdings of shares by US$264 million and pumped US$457 million more into government bonds, official figures show.
“Inflows into debt are boosting the rupee,” said Naveen Raghuvanshi, a currency trader at Development Credit Bank Ltd in Mumbai. “Sentiment is positive, and equity flows are supportive too.”
Indonesia’s rupiah declined for a third week, weakening 0.8 percent to 9,118 per US dollar, amid concern government plans to raise fuel prices would stoke inflation. Foreign investors trimmed their holding of local-currency government bonds 1.7 percent this month through Feb. 20 to 232 trillion rupiah, according to finance ministry statistics.
Elsewhere, the Singapore dollar rose 0.2 percent to S$1.2552 versus the greenback, while the South Korean won was little changed at NT$29.582.
The Philippine peso slid 0.5 percent to 42.825.
Polytronics Technology Corp (聚鼎科技) yesterday announced that it is buying Henkel AG’s thermal clad dielectric material (TCLAD) business division for US$26 million as the Taiwanese firm aims to improve its technology, product portfolio and revenue performance. Polytronics, headquartered in the Hsinchu Science Park (新竹科學園區), is a supplier of protection components and heat dissipation materials. The firm entered the metallic heat-dissipation substrate market in 2007 and developed a unique solventless production process. Its board of directors approved signing an agreement with Henkel to acquire the German chemical firm’s TCLAD division in the US. The purchase includes all assets and business interests, including equipment,
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in
With the US dollar expected to weaken in the next 12 months due to near-zero interest rates, investors should consider purchasing US corporate bonds, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Thursday. The bank said that the US Federal Reserve since last month has been buying bonds issued by US companies to curb default rates. The US dollar is forecast to be weaker against the pound, the euro and the yen, as well as the Canadian dollar, the Swedish krona and the Swiss franc, as the greenback lacks high investment returns after the Fed in March slashed the benchmark interest rate
A Bollywood actor’s face tattooed on his arm, Sandeep Bacche’s devotion shocks few in India where stars enjoy semi-divine status, but even there the hallowed silver screen might be losing its shine to streaming services and pandemic fears. “Whenever things get better and theaters begin operations, I will watch three movies a day for sure just as a way to celebrate,” said the Mumbai rickshaw driver, who is recovering from the virus himself. However, others might not join the party. With cinemas shut for months due to a COVID-19 lockdown, and little prospect they will reopen soon, frustrated Bollywood producers have turned to