Asian currencies gained this week on signs policymakers in the US and Europe would raise efforts to revive growth, boosting fund flows into emerging-market assets.
Many US policymakers favored a new large-scale asset-purchase program to “provide additional support for the economic recovery,” according to minutes from the US Federal Reserve’s latest meeting released this week.
German Chancellor Angela Merkel said on Thursday that her country and France would coordinate on their approach to keep pressure on Greece to overhaul its economy. Stock markets in Taiwan and South Korea attracted a total US$916 million of foreign capital this week through Friday, exchange data show.
“There are some positive signs coming from Greece, and the Fed said further easing may be warranted soon,” said Choong Yin Pheng, senior manager for fixed income and economic research at Hong Leong Bank Bhd. in Kuala Lumpur. “This is keeping risk currencies supported.”
The Bloomberg-JPMorgan Asia Dollar Index rose 0.2 percent this week to 115.39 in Hong Kong, the biggest advance since the five-day period ended Aug. 3.
The New Taiwan dollar rose 0.1 percent against the US dollar this week to NT$30.002, although central bank intervention kept the exchange rate above NT$30 amid concern over Taiwan’s falling exports, dealers said.
The Malaysian ringgit climbed 1 percent since Aug. 17 to 3.1018 per US dollar, according to data compiled by Bloomberg. Thailand’s baht gained 0.9 percent to 31.24, while the Philippine peso appreciated 0.6 percent to 42.167. India’s rupee advanced 0.5 percent to 55.4950 in Mumbai.
The peso had its best week in more than a month after the government said it planned to increase spending to spur growth. Philippine Finance Secretary Cesar Purisima said on Thursday that last month’s budget deficit was within expectations and the government has fiscal space to pump prime the economy.
South Korea’s won and the ringgit weakened on Friday after Federal Reserve Bank of St. Louis President James Bullard said on Thursdaythat recent signs of improvement in the economy would prompt him to oppose any new Fed program to buy bonds.
China’s yuan rose 0.06 percent this week to 6.3545, headed for a fourth week of strengthening, the longest run of gains since April last year. However, the currency weakened on Friday as central bank Governor Zhou Xiaochuan (周小川) said the country still faces relatively big pressure on economic growth, according to a statement posted on the central bank’s Web site.
Elsewhere, Indonesia’s rupiah was unchanged from Aug. 17 at 9,528; the Singapore dollar gained 0.2 percent to S$1.2497 and the South Korean won was little changed at 1,134.15. Vietnam’s dong fell 0.1 percent to 20,875.