Asian currencies rose, adding to a weekly advance, after Singapore unexpectedly kept its bias for currency gains and US jobless claims fell, spurring demand for riskier assets.
The Monetary Authority of Singapore said in its biannual policy review today it will maintain a modest and gradual appreciation in its currency to contain inflation. Applications for unemployment benefit in the US dropped to 339,000 in the week ended on Oct. 6, the fewest since February 2008, data showed yesterday. Gains in the Bloomberg-JPMorgan Asia Dollar Index were curbed this week after the IMF on Tuesday cut its projections for global expansion.
“The US data overnight and the surprise move of the MAS are positive for risk sentiment,” said Radhika Rao, an economist at Forecast Pte in Singapore.
The New Taiwan dollar rose 0.2 percent on Friday to NT$29.36 against its US counterpart, the biggest gain in two weeks. It was little changed for the week. One-month non-deliverable forwards in the currency climbed 0.1 percent to NT$29.16 during the five days, data compiled by Bloomberg show.
One-month implied volatility in the NT dollar, a measure of exchange-rate swings used to price options, fell 28 basis points, or 0.28 percentage point, to 3.51 percent from the end of last week.
The overnight interbank lending rate was little changed at 0.39 percent, a weighted average compiled by the Taiwan Interbank Money Center shows.
Singapore’s dollar strengthened 0.5 percent to S$1.2218 against the greenback as of 5:18pm local time, boosting its weekly advance to 0.6 percent, according to data compiled by Bloomberg. Malaysia’s ringgit appreciated 0.3 percent today to 3.0585, paring a decline in the past five days to 0.2 percent. China’s yuan rose 0.2 percent for a weekly gain of 0.3 percent.
The Asia Dollar Index, which tracks the region’s 10 most-active currencies outside Japan, advanced 0.3 percent today and 0.3 percent this week.
China’s yuan rose beyond 6.28 per US dollar for the first time in 19 years this week amid speculation the government will step up measures to counter a slowdown. The People’s Bank of China raised the reference rate by 0.2 percent today, the most since March, to 6.3264.
The euro gained as much as 0.5 percent to US$1.2992 before trading closed at US$1.2951 at 5pm New York time, up 0.2 percent. It lost 0.7 percent on the week. The euro rose 0.3 percent to ￥101.61, paring a 0.9 percent weekly decline, after briefly exceeding its 200-day moving average for the first time in three days. The Japanese currency slipped 0.1 percent to ￥78.44 to the US dollar.
South Africa’s currency snapped a three-day winning streak after S&P cut the nation’s credit rating one step to “BBB” with a negative outlook as a wave of strikes in the mining industry cause political uncertainty and social tensions put pressure on government spending.
The rand sank 0.8 percent to 8.7295 per US dollar after climbing earlier to 8.5774, the strongest level since Oct. 5.
Australia’s dollar rose, trading 0.2 percent from its highest level in more than a week as gains in commodity prices boosted demand for the currency.
The Aussie has climbed 0.9 percent this week.