Aug. 1 (Bloomberg) -- Asian currencies strengthened, led by Malaysia’s ringgit, on the prospect of more interest-rate increases and as an agreement to raise the U.S. debt ceiling boosted demand for emerging-market assets.
The Bloomberg-JPMorgan Asia Dollar Index approached a 14- year high reached last week as data showed export growth and consumer-price gains in South Korea exceeded economist’s predictions, while Chinese manufacturing growth also beat forecasts. The MSCI Asia-Pacific Index of shares snapped a three-day loss as President Barack Obama said leaders of both parties in the House and Senate had reached an agreement to raise the nation’s debt ceiling and cut the federal deficit.
The Asia Dollar Index, which tracks the region’s 10 most- traded currencies excluding the yen, gained 0.2 percent to 120.17 as of 4:16 p.m. in Hong Kong. The ringgit jumped 0.8 percent to 2.9430 per dollar and the Philippine peso climbed 0.5 percent to 41.925, touching a three-year high of 41.903, according to data compiled by Bloomberg. Indonesia’s rupiah added 0.5 percent to 8,463 and the Thai baht advanced 0.4 percent to 29.72.
“Data in Asia are spurring speculation of more rate hikes in the region, boosting its yield advantage,” said Tohru Nishihama, an economist at Dai-ichi Life Research Institute Inc. in Tokyo. “The U.S. agreement also improves sentiment for risk- taking, which is generally positive for Asia’s emerging-market currencies.”
China’s Purchasing Managers’ Index was at 50.7 for July, more than the 50.2 median forecast in a Bloomberg survey. A reading above 50 indicates expansion. The yuan rose 0.04 percent to 6.4340 per dollar after rising 0.15 percent last week.
Global funds bought $3 billion more Indonesian, South Korean and Thai stocks than they sold in July, according to exchange data. Asia’s emerging-market economies will expand 8.4 percent in 2011, almost quadruple the 2.2 percent growth projected for developed nations, the International Monetary Fund said in June.
India, South Korea, China, Indonesia, the Philippines, Malaysia, Taiwan and Thailand have raised borrowing costs this year. India’s benchmark rate is 8 percent and Indonesia’s is 6.75 percent, compared with a maximum 0.25 percent in the U.S. and Japan.
South Korea’s won approached a three-year high after a report showed consumer prices rose 4.7 percent last month, more than the 4.4 percent median forecast in a Bloomberg survey. A separate report showed exports climbed 27.3 percent from a year earlier in July, compared with a revised gain of 13.6 percent the previous month, contributing to a record trade surplus. The currency strengthened 0.3 percent to 1,050.70 per dollar.
“The inflation data shows the government will focus on countering inflation,” said Kim Sung Soon, a Seoul-based senior currency trader at the state-run Industrial Bank of Korea. “The case for further interest-rate rises is strengthened.”
The baht strengthened by the most in a week after a report showed consumer prices rose 4.08 percent in July from a year earlier, holding above 4 percent for the fourth month.
Indonesia’s rupiah touched a seven-year high of 8,463 per dollar as a report showed exports climbed 49.3 percent in June from a year earlier, more than the median forecast in a Bloomberg survey for a 44.3 percent increase. A separate report said inflation slowed to 4.61 percent last month from 5.54 percent in June.
Elsewhere, the Singapore dollar strengthened 0.4 percent against its U.S. counterpart to S$1.2010 and the Taiwan dollar rose 0.2 percent to NT28.838. India’s rupee gained 0.3 percent to 44.08.
--With assistance from Jiyeun Lee in Seoul. Editors: Andrew Janes, James Regan
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