Sun, Jan 20, 2013 - Page 15 News List

Asian currencies boosted by global recovery signs

OPTIMISTIC OUTLOOK:Better-than-expected data from the US and China sparked hope that the world’s economy has bottomed out and is starting to bounce back

Bloomberg and Staff writer, with CNA

Asian currencies had a fourth weekly gain, the longest winning streak since September, on optimism that the global economy is recovering.

China’s economic growth accelerated for the first time in two years, with industrial output picking up, Chinese government figures released on Friday show.

Housing starts in the US, the world’s No. 1 economy, topped estimates and applications for jobless benefits declined, reports showed on Thursday.

“There’s a lot of risk-on sentiment after US data came in stronger than expected,” said Vishnu Varathan, a Singapore-based economist at Mizuho Corporate Bank Ltd.

The pickup in China’s economy “is also helping Asian currencies,” he added.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most active currencies, excluding the yen, advanced 0.2 percent this week. The gauge reached a 16-month high on Friday.

India’s rupee led gains, climbing 1.9 percent to 53.7050 per US dollar, data compiled by Bloomberg show. Thailand’s baht appreciated 1.8 percent to 29.74, completing its biggest weekly advance since 2011, while Malaysia’s ringgit rose 0.3 percent to 3.0103.

In Taipei, the New Taiwan dollar fell 0.1 percent to NT$29.06 against the greenback on Friday, compared with NT$29.039 on Jan. 11.

Since the end of the third quarter of last year, the New Taiwan dollar has risen about NT$0.282, or 0.96, percent against the US dollar. Without the central bank’s intervention, the local currency could have breached the NT$29 mark.

The strength of the NT dollar is largely due to the massive inflows of foreign funds after major central banks around the world, such as the US Federal Reserve and the Bank of Japan, raised liquidity levels greatly to boost the economy.

Elsewhere in the region, the Philippine peso advanced 0.1 percent this week to 40.575 against the greenback and the Chinese yuan traded at 6.2154, compared with 6.2161 at the end of last week. South Korea’s won dropped 0.2 percent to 1,057.08, while Indonesia’s rupiah was little changed at 9,630.

India’s rupee rose to an 11-week high on Friday after the government allowed state refiners to gradually increase diesel prices, a move that may help shore up public finances.

China’s GDP increased 7.9 percent in the fourth quarter from a year earlier, after a 7.4 percent gain in the previous three months.

Housing starts in the US climbed 12.1 percent last month to a 954,000 annual rate, exceeding all 84 estimates in a Bloomberg survey.

“Global economic activity is finally bottoming out while tail risk has diminished,” Credit Agricole CIB analysts led by Hong Kong-based Mitul Kotecha wrote in a report released on Friday.

The yen weakened beyond ¥90 to the US dollar for the first time in 31 months amid speculation that the currency will slide further as the Bank of Japan and the Japanese government work aggressively to spur economic growth.

The euro gained versus the majority of its most-traded peers as Spain’s borrowing costs fell at a 4.5 billion euro (US$6 billion) sale of bonds, underscoring increased confidence in European debt markets.

The yen declined 0.2 percent to 90.10 per US dollar this week in New York and touched ¥90.21 on Friday, the weakest level since June 23, 2010. It was the 10th consecutive weekly loss. The Japanese currency depreciated 0.8 percent to ¥119.98 per euro.

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