Asian Currencies Gain, Led by Won, as China Growth Accelerates
By Lilian Karunungan and David Yong
April 15 (Bloomberg) -- Asian currencies rallied to the highest levels since at least September 2008, led by South Korea’s won and the Philippine peso, as accelerating growth in China bolstered the outlook for regional economies and exports.
The Bloomberg-JPMorgan Asia Dollar Index rose to a peak last reached in August 2008 on speculation China is a step closer to ending a fixed peg to the dollar. The nation’s gross domestic product increased 11.9 percent in the first quarter, the fastest pace in three years, while inflation slowed. Singapore unexpectedly revalued its currency yesterday as growth quickened, raising the odds central banks in the region will also tighten monetary policy.
“The combination of China’s strong growth and relatively lower inflation is very good for risk,” said Craig Chan, a Singapore-based foreign-exchange strategist at Nomura Holdings Inc. “Good news has been coming out globally and within the region. I think Asian currencies can continue to move higher.”
The won strengthened 0.4 percent to 1,107.55 per dollar as of the 3 p.m. close in Seoul, according to data compiled by Bloomberg. The Philippine peso climbed 0.4 percent to 44.36 and Malaysia’s ringgit advanced 0.1 percent to 3.1965. The Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, climbed as high as 113.13.
China Growth
China’s first-quarter growth was faster than the 10.7 percent rate in the prior three months and the 11.7 percent median estimate of 24 economists in a Bloomberg News survey. Inflation cooled to 2.4 percent in March from 2.7 percent the previous month. Singapore’s gross domestic product expanded at an annualized 32.1 percent pace in the first quarter.
China including Hong Kong is the biggest destination for goods from South Korea, Taiwan and Malaysia, and the mainland’s growth outlook is encouraging international investors to increase holdings of regional stocks, fueling demand for local currencies. The MSCI Asia-Pacific Index of shares climbed 0.7 percent today to a 20-month high.
South Korea’s won strengthened to the highest level since the collapse of Lehman Brothers Holdings Inc. in September 2008. The currency reached 1,107.20 per dollar.
The won added to yesterday’s biggest gain in seven weeks and the Kospi index of shares had its best close in 22 months as funds based abroad bought more local equities than they sold on all but two days since the end of February.
‘Bullish View’
Moody’s Investors Service yesterday raised Korea’s sovereign credit ratings as a report showed the unemployment rate declined in March by the most in more than 10 years. The Bank of Korea also said it will maintain its accommodative policy for the time being.
“We’re seeing investors having a bullish view on Korea’s economic data, which has been consistent with the recovery,” said Mitul Kotecha, Hong Kong-based head of global currency at Credit Agricole CIB. “The question now is what happens in terms of policy, whether we will see a move in interest rates. I see that potentially happening in June.”
Taiwan’s dollar advanced to the strongest level in more than 19 months as overseas investors bought more Taiwan shares than they sold for a 14th day, the longest run of net purchases in three months, according to Taiwan Stock Exchange data.
The currency appreciated 0.3 percent to NT$31.375 and reached NT$31.339.
Exporters are selling the U.S. dollar to guard against further appreciation in the local currency, according to Yang Kung-yi at Shanghai Commercial & Savings Bank.
“Funds are flowing into Asia,” said Yang, a currency trader at Shanghai Commercial in Taipei. “Exporters are active” in selling the greenback, he said.
Taiwan Exports
The island’s government may report on April 20 that export orders, an indication of shipments in the next one to three months, increased 38 percent in March from a year earlier, compared with a 36 percent gain the previous month, according to the median estimate of economists in a Bloomberg survey.
The ringgit approached a 23-month high after the Malaysian Institute of Economic Research said today that Southeast Asia’s third-largest economy may expand 5.2 percent in 2010, raising its estimate from 3.7 percent. Shipments abroad may jump 8.2 percent and imports 8.8 percent, the agency said.
“China growing at this rate means people are going to find big support for commodity currencies including, to some extent, the ringgit,” said Azmi Shukri Rahman, a foreign-exchange trader at CIMB Investment Bank Bhd. in Kuala Lumpur.
Not a Concern
Malaysia’s currency reached 3.1785 on April 12, the strongest level since May 2008, and is up 7.1 percent this year. The ringgit’s appreciation, the best in Asia, “is not a cause for concern” and shouldn’t impact local exporters’ competitiveness, Trade Minister Mustapa Mohamed said yesterday in Kuala Lumpur.
Elsewhere in the region, the Singapore dollar rose 0.2 percent to S$1.3749 versus the greenback. It touched S$1.3719, the highest level since August 2008. The Indonesian rupiah and China’s yuan were little changed at 9,010 and 6.8258, respectively. Vietnam’s dong climbed 0.2 percent to 19,005.
Financial markets in Thailand are closed for a holiday.
By Lilian Karunungan and David Yong
April 15 (Bloomberg) -- Asian currencies rallied to the highest levels since at least September 2008, led by South Korea’s won and the Philippine peso, as accelerating growth in China bolstered the outlook for regional economies and exports.
The Bloomberg-JPMorgan Asia Dollar Index rose to a peak last reached in August 2008 on speculation China is a step closer to ending a fixed peg to the dollar. The nation’s gross domestic product increased 11.9 percent in the first quarter, the fastest pace in three years, while inflation slowed. Singapore unexpectedly revalued its currency yesterday as growth quickened, raising the odds central banks in the region will also tighten monetary policy.
“The combination of China’s strong growth and relatively lower inflation is very good for risk,” said Craig Chan, a Singapore-based foreign-exchange strategist at Nomura Holdings Inc. “Good news has been coming out globally and within the region. I think Asian currencies can continue to move higher.”
The won strengthened 0.4 percent to 1,107.55 per dollar as of the 3 p.m. close in Seoul, according to data compiled by Bloomberg. The Philippine peso climbed 0.4 percent to 44.36 and Malaysia’s ringgit advanced 0.1 percent to 3.1965. The Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, climbed as high as 113.13.
China Growth
China’s first-quarter growth was faster than the 10.7 percent rate in the prior three months and the 11.7 percent median estimate of 24 economists in a Bloomberg News survey. Inflation cooled to 2.4 percent in March from 2.7 percent the previous month. Singapore’s gross domestic product expanded at an annualized 32.1 percent pace in the first quarter.
China including Hong Kong is the biggest destination for goods from South Korea, Taiwan and Malaysia, and the mainland’s growth outlook is encouraging international investors to increase holdings of regional stocks, fueling demand for local currencies. The MSCI Asia-Pacific Index of shares climbed 0.7 percent today to a 20-month high.
South Korea’s won strengthened to the highest level since the collapse of Lehman Brothers Holdings Inc. in September 2008. The currency reached 1,107.20 per dollar.
The won added to yesterday’s biggest gain in seven weeks and the Kospi index of shares had its best close in 22 months as funds based abroad bought more local equities than they sold on all but two days since the end of February.
‘Bullish View’
Moody’s Investors Service yesterday raised Korea’s sovereign credit ratings as a report showed the unemployment rate declined in March by the most in more than 10 years. The Bank of Korea also said it will maintain its accommodative policy for the time being.
“We’re seeing investors having a bullish view on Korea’s economic data, which has been consistent with the recovery,” said Mitul Kotecha, Hong Kong-based head of global currency at Credit Agricole CIB. “The question now is what happens in terms of policy, whether we will see a move in interest rates. I see that potentially happening in June.”
Taiwan’s dollar advanced to the strongest level in more than 19 months as overseas investors bought more Taiwan shares than they sold for a 14th day, the longest run of net purchases in three months, according to Taiwan Stock Exchange data.
The currency appreciated 0.3 percent to NT$31.375 and reached NT$31.339.
Exporters are selling the U.S. dollar to guard against further appreciation in the local currency, according to Yang Kung-yi at Shanghai Commercial & Savings Bank.
“Funds are flowing into Asia,” said Yang, a currency trader at Shanghai Commercial in Taipei. “Exporters are active” in selling the greenback, he said.
Taiwan Exports
The island’s government may report on April 20 that export orders, an indication of shipments in the next one to three months, increased 38 percent in March from a year earlier, compared with a 36 percent gain the previous month, according to the median estimate of economists in a Bloomberg survey.
The ringgit approached a 23-month high after the Malaysian Institute of Economic Research said today that Southeast Asia’s third-largest economy may expand 5.2 percent in 2010, raising its estimate from 3.7 percent. Shipments abroad may jump 8.2 percent and imports 8.8 percent, the agency said.
“China growing at this rate means people are going to find big support for commodity currencies including, to some extent, the ringgit,” said Azmi Shukri Rahman, a foreign-exchange trader at CIMB Investment Bank Bhd. in Kuala Lumpur.
Not a Concern
Malaysia’s currency reached 3.1785 on April 12, the strongest level since May 2008, and is up 7.1 percent this year. The ringgit’s appreciation, the best in Asia, “is not a cause for concern” and shouldn’t impact local exporters’ competitiveness, Trade Minister Mustapa Mohamed said yesterday in Kuala Lumpur.
Elsewhere in the region, the Singapore dollar rose 0.2 percent to S$1.3749 versus the greenback. It touched S$1.3719, the highest level since August 2008. The Indonesian rupiah and China’s yuan were little changed at 9,010 and 6.8258, respectively. Vietnam’s dong climbed 0.2 percent to 19,005.
Financial markets in Thailand are closed for a holiday.