Asian currencies ended the week higher, led by Malaysia’s ringgit, on speculation the US would delay raising interest rates and China might take more measures to boost growth.
The Bloomberg-JPMorgan Asia Dollar Index advanced as US data showed retail sales barely budged last month and producer prices unexpectedly fell.
The People’s Bank of China, which, on Sunday, lowered benchmark rates for the third time since November last year, will loosen monetary policy further, economists surveyed by Bloomberg forecast.
“This week we saw quite broad-based dollar selling,” said Vishnu Varathan, a Singapore-based economist at Mizuho Bank Ltd. “China is aggressively trying to backstop the slide in growth. To some extent, that perhaps fed into the positive Asian currency sentiment.”
Malaysia’s ringgit climbed 0.9 percent against the US dollar this week as of 4:37pm on Friday in Kuala Lumpur, buoyed by a rebound in crude oil.
The New Taiwan dollar rose 0.5 percent this week and 0.2 percent on Friday to NT$30.612 versus the greenback, as disappointing US economic data dampened the outlook for higher interest rates in the world’s largest economy.
About 77 percent of Taiwanese listed firms invest in China, according to the financial regulator, where benchmark borrowing costs were cut this month for the third time since November.
“Expectations for a US rate increase are receding,” said Woods Chen (陳森林), an economist at Ta Chong Bank Ltd (大眾銀行) in Taipei.
Taiwanese businesses are also bringing funds back from China, where interest rates are falling quickly, he said.
The NT dollar rose even as inflows into equities slowed, with global funds adding US$339 million to their stock holdings over the past five days, the least in four weeks, Taiwan Stock Exchange data show.
In the government bond market, the yield on notes due March 2025 fell 5 basis points this week and 3 basis points on Friday to 1.569 percent, Taipei Exchange prices show.
India’s rupee rose 0.7 percent, and the Singapore dollar gained 0.3 percent, Bloomberg data show.
The Bloomberg Dollar Spot Index, a gauge of the greenback’s strength, declined 0.9 percent in a fifth weekly retreat.
China’s yuan strengthened 0.05 percent, advancing for the first week in three.
The central bank is expected to lower its one-year lending rate by a quarter of a percentage point to 4.85 percent before the end of the year, while major banks’ reserve-requirement ratios are likely to be reduced by 1 percentage point to 17.5 percent, according to a Bloomberg survey conducted May 10 to 12.
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