Asian currencies had their biggest weekly gain in more than four months as an uneven recovery in the world’s No. 1 economy increased bets that the US Federal Reserve will delay raising interest rates, boosting demand for riskier assets.
Global investors pumped US$1.3 billion into six Asian emerging stock markets tracked by Bloomberg this week.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most active currencies excluding the yen, rose 0.4 percent this week, the most since the five days ended on March 28.
In Taipei, the New Taiwan dollar added 0.1 percent this week to close at NT$30.035, prices from Taipei Forex Inc show.
The greenback fell against its local counterpart on Friday, shedding NT$0.010 to close at NT$30.035 compared with NT$30.066 on Aug. 8 as other regional currencies extended their gains, which encouraged traders to pick up the Taiwanese unit, dealers said.
Interest in regional currencies helped push the US dollar into negative territory for the second consecutive session, they added.
However, the gains posted by the NT dollar were limited by local central bank’s intervention to slow down the pace of the local unit’s appreciation and protect Taiwan-made exports, dealers said.
Local exporters and foreign banks operating in Taiwan stood on the sell side, putting downward pressure on the US unit, dealers said.
The won, which rose 0.42 percent against the US dollar at one point on Friday, extended its momentum from the previous day after the Bank of Korea cut its seven-day repurchase rate to 2.25 percent from 2.5 percent on Thursday, the first reduction since May last year.
After the decision, the won touched 1,020.72, the strongest level since July 15. The South Korean currency advanced 1.5 percent to 1,020.93 as of Thursday, with markets closed on Friday.
“We had a confluence of supportive factors,” Hong Kong-based Credit Agricole CIB strategist Dariusz Kowalczyk said.
US data showing retail sales were little changed last month and that jobless claims came in at 311,000 last week, higher than the 295,000 median forecast in a Bloomberg survey, reduced “fears of capital outflows from Asia back to the US market,” Kowalczyk said, adding that “tensions between Russia and Ukraine have eased, which is supportive for all emerging markets.”
Elsewhere in Asia, Malaysia’s ringgit gained 1.7 percent to 3.1537 per US dollar and the Philippine peso added 1.1 percent to 43.665, data compiled by Bloomberg show.
The ringgit had its biggest weekly gain since September last year and rose 0.8 percent on Friday as data showed Malaysia’s economy expanded 6.4 percent in the second quarter, the most since 2012.
The yuan rose to a five-month high on Friday on speculation that the People’s Bank of China is allowing more gains.
Yuan positions at Chinese financial institutions accumulated from foreign exchange purchases — a barometer of fund flows — climbed 37.8 billion yuan (US$6.1 billion) last month from a month earlier. They fell in June after rising by the least in nine months in May. That indicates a “very low level” of intervention by the Chinese central bank, according to Credit Agricole.
The yuan rose 0.10 percent to 6.1470 in Shanghai on Friday, extending this week’s advance to 0.16 percent, China Foreign Exchange Trade System prices show.
The peso had its biggest weekly advance since May on speculation the Philippines’ central bank will raise borrowing costs again to cool inflation. Consumer prices rose 4.9 percent last month from a year earlier, the most since October 2011.
Indonesia’s rupiah advanced 0.9 percent this week to 11,675 per US dollar, according to prices from local banks. The currency was steady on Friday after data showed the nation’s current account deficit widened to near a record last quarter.
Elsewhere in Asia, Thailand’s baht rallied 0.8 percent this week to 31.852 against the greenback., India’s rupee climbed 0.6 percent to 60.7687 on Thursday and Vietnam’s dong rose 0.1 percent to 21,200.
Financial markets were closed in New Delhi on Friday.
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