Asian currencies rose for a fourth week on signs of a pickup in Chinese manufacturing and as US jobs data fueled speculation that the US Federal Reserve will delay cutting its record stimulus.
The Bloomberg-JPMorgan Asia Dollar Index added 0.1 percent from Oct. 18, as China’s yuan reached its strongest level in 20 years and Indonesia’s rupiah had its best week since June 2009.
“There’s still scope for upside in Asian currencies,” said Choong Yin-pheng, senior manager at Hong Leong Bank Bhd. “The consensus view is that we are not going to see the Fed tapering this year and Chinese data is upbeat.”
In Taipei, the New Taiwan dollar was steady at NT$29.455, compared with NT$29.446 a week ago.
The greenback rose against the Taiwanese currency on Friday, gaining NT$0.003 as central bank intervention helped the greenback recover its earlier losses toward the end of the session, dealers said.
As the US dollar fluctuated in a narrow range throughout the session, it was not necessary for the central bank to try too hard to reverse its losses, the dealers said.
The US currency continued its downturn after the foreign exchange market opened as traders took cues from the strength of most other regional currencies to cut their greenback holdings in exchange for the NT dollar, the dealers said.
The willingness to hold regional currencies grew amid optimism toward China’s economy after HSBC Holdings PLC and Markit Economics released data on Thursday showing that the Purchasing Managers’ Index for this month in the country hit 50.9 — the highest level in seven months — they said.
In Shanghai, the yuan added 0.2 percent from a week ago to 6.0840 per US dollar, according to the China Foreign Exchange Trade System, appreciating for a third week. The yuan rose as high as 6.0802 per US dollar on Friday, the strongest level since the Chinese government unified the official and market exchange rates at the end of 1993.
In Jakarta, the rupiah jumped 2.8 percent to 11,015. The Indonesian currency strengthened for a fourth week as global funds bought more Indonesian stocks than they sold in the four days through Thursday — the first net inflow in a month — according to exchange data.
Malaysia’s ringgit rallied in offshore markets on Friday after the government proposed to cut its budget deficit for next year. The ringgit gained 0.1 percent on Friday to 3.1566 per US dollar in Kuala Lumpur and was little changed from a week ago.
Malaysia plans to cut its fiscal deficit to 3.5 percent of GDP next year from 4 percent this year, the Malaysian Ministry of Finance said in a report. Malaysian Prime Minister Najib Razak on Friday proposed a goods and services tax from April 2015 to broaden revenue base, and lower corporate and personal income taxes.
Meanwhile, South Korea’s won retreated from a two-year high on suspected intervention from Bank of Korea. The won fell 0.1 percent from a week ago to 1,062.06 per US dollar after government officials said they would act to counter any “herd behavior.”
Ryoo Sang-dai, director-general of Bank of Korea’s international department, on Thursday declined to comment on whether authorities intervened in the currency market, or on the size of the suspected action.
In Thailand, the baht weakened 0.1 percent to 31.089 per US dollar from a week ago. Exports shrank 7.1 percent last month from a year earlier, versus a 3.9 percent gain in August, the Thai government said. The Bank of Thailand cut its growth forecast for this year to 3.7 percent from 4.2 percent.
Elsewhere, India’s rupee weakened 0.3 percent to 61.4600 per US dollar, while Vietnam’s dong gained 0.1 percent to 21,100 and the Philippine peso gained 0.1 percent to 43.035 versus the greenback.
Meanwhile, the US dollar had its first back-to-back weekly losses against the euro in a month as weaker-than-forecast US economic data added to bets the Fed will put off slowing stimulus.
The greenback touched a two-year low against the euro as US employers added fewer jobs than forecast and consumer confidence sagged, while the yen gained for a second week versus the US dollar.
The US currency depreciated 0.8 percent to US$1.3802 per euro this week in New York and touched US$1.3832 on Friday — the weakest level since November 2011 — and declined 0.3 percent to ￥Y97.42.
Europe’s 17-nation shared currency gained 0.5 percent to ￥134.46 in a third weekly advance. It touched ￥135.51 on Tuesday, the highest level since November 2009.
The Bloomberg US Dollar Index fell to an eight-month low on Tuesday after data showed employers added 148,000 workers last month, trailing the forecast for 180,000.
In London, the pound dropped 0.8 percent this week to ￡85.36 per euro after depreciating to ￡85.55 on Thursday, the weakest level since Aug. 29.
The UK currency was little changed against the greenback at US$1.6164 after climbing to US$1.6257 on Wednesday, the highest level since Oct. 1.