India’s rupee and South Korea’s won led gains in Asian currencies this week as global money managers boosted holdings of the region’s assets on signs of a pickup in the world economy.
The Bloomberg-JPMorgan Asia Dollar Index had its first weekly advance this month after data showed Chinese industrial companies’ profits rose for a third month last month, while South Korea’s current-account surplus widened to a record US$6.9 billion. International funds plowed US$1.6 billion into the stock markets of India, Taiwan and South Korea this week, exchange data show. The MSCI Asia Pacific Index of regional shares rose for a sixth week.
“[The] strength in Taiwan and [South] Korean currencies is related to a cyclical recovery in the region’s export-oriented economies,” said Ju Wang, a senior foreign-exchange strategist in Hong Kong at HSBC Holdings PLC. “Both are closely linked to China and recent data suggest some recovery is happening. Solid net inflows into emerging-market funds continue.”
The rupee strengthened 0.5 percent this week to 54.7750 per dollar in Mumbai, while the New Taiwan dollar weakened 0.1 percent to NT$29.136, according to data compiled by Bloomberg.
The US dollar rose against the New Taiwan dollar on Friday after the central bank bought into the greenback, helping the unit reverse its earlier losses by the end of the session, dealers said.
A 0.66 percent rebound in Taiwan’s main bourse also exerted downward pressure on the US dollar after foreign institutional investors bought NT$4.14 billion in local shares, dealers said.
The Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, rose 0.2 percent this week to 118.09.
The won appreciated 0.4 percent to 1,070.53, and Malaysia’s ringgit advanced to 3.0640 from 3.0645 at the end of last week.
China’s yuan rose 0.04 percent on Friday to 6.2335, paring the weekly loss to 0.06 percent.
“The trade and investment demand for yuan and Chinese assets has steadily increased, providing support to the currency,” said Bruce Yam, a currency strategist at Sun Hung Kai Financial in Hong Kong. “No politician could afford to derail a recovery in the world’s largest economy, so risk appetite has improved on hopes that it’ll be solved.”
Elsewhere, Thailand’s baht and the Philippine peso were little changed for the week at 30.60 per US dollar and 41.058 respectively. Indonesia’s rupiah rose 0.2 percent to 9,638, while Vietnam’s dong advanced 0.1 percent to 20,838.
For the year, South Korea’s won gained 7.7 percent, the most among the 11 most-traded Asian currencies, followed by the peso and Singapore dollar. Friday was the last trading day of the year for Taiwan, South Korea, Indonesia, Thailand and the Philippines.