The New Taiwan dollar had the biggest weekly gain since February as a US Federal Reserve plan to lift asset purchases spurred demand for emerging-market assets.
The currency touched the strongest level in four months after global funds bought US$944 million more Taiwanese stocks than they sold this week, taking this year’s net purchases to US$1.5 billion, exchange data show.
“Confirmation of QE3 [on Thursday] gave the Taiwan dollar a strong boost,” said Tarsicio Tong (湯健揚), a foreign-exchange trader at Union Bank of Taiwan (聯邦銀行). “The rally will probably last for another day or two, but after the news subsides traders will look at fundamentals again.”
The NT dollar rose 1.3 percent this week to NT$29.469 against its US counterpart, according to Taipei Forex Inc. It advanced 0.8 percent on Friday and touched NT$29.375 earlier, the strongest level since May 11.
Malaysia’s ringgit and Thailand’s baht reached four-month highs as Asian stocks posted their biggest weekly advance this year.
The ringgit strengthened 2.4 percent this week to 3.0338 per US dollar in Kuala Lumpur, according to data compiled by Bloomberg. The baht advanced 1.5 percent to 30.75 and South Korea’s won rose 1.2 percent to 1,117.30 following a credit-rating upgrade.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s most-active currencies, climbed 0.9 percent this week to 116.92, the most since the five days ended Dec. 2 last year. The gauge’s 60-day historical volatility dropped to 3.42 percent from 3.45 percent on Sept. 7.
The MSCI Asia-Pacific Index added 3.8 percent this week, the biggest gain since December. Global funds bought US$969 million more South Korean and Taiwanese stocks than they sold this week through Thursday, taking net purchases for those countries this year to US$12 billion, exchange data show.
China’s yuan appreciated 0.45 percent this week to 6.3145 per US dollar in Shanghai, the most in seven months, according to the China Foreign Exchange System.
Elsewhere, the Philippine peso advanced 0.6 percent this week to 41.405 per US dollar, the strongest level since April 2008. India’s rupee advanced 2 percent to 54.3075, Indonesia’s rupiah rose 0.9 percent to 9,505 and Vietnam’s dong was little changed at 20,850.
The US dollar fell by the most in 11 months against the euro after the US Federal Reserve said it would start a third round of asset purchases to boost the economy, which tends to debase the currency.
The US currency fell 2.5 percent against the euro this week to US$1.3130, after reaching a four-month low of US$1.3169 on Friday. It rose 0.2 percent to ￥78.39, after touching ￥77.13 on Thursday, the least since Feb. 9. The euro added 2.7 percent to ￥102.93.
Sterling rose 1.4 percent in the week to US$1.6241 at 5:02pm London time on Friday, after climbing to US$1.6256, the highest level since April 30. The pound dropped 1 percent to ￡0.8088 per euro after touching ￡0.8115, the weakest since June 15.