Bloomberg News

Asian Currencies Gain for Fifth Day on Optimism Recovery Intact

September 01, 2011

Sept. 1 (Bloomberg) -- Asian currencies advanced for a fifth day, the longest run of gains in almost two months, on optimism the global economic recovery is still intact.

The Bloomberg-JPMorgan Asia Dollar Index was near its highest level in two weeks and the MSCI Asia-Pacific Index of shares rose as China’s manufacturing index rebounded from a 29- month low in August and U.S. factory orders increased more than estimated in July. Global investors bought $569 million more equities in South Korea and Taiwan than they sold in the first three days of this week, exchange data show.

“The strength in Asian currencies is driven by strong performance in equities,” said Tetsuo Yoshikoshi, a senior economist at Sumitomo Mitsui Banking Corp. in Singapore. “There is a risk-taking environment.”

The won appreciated 0.4 percent to 1,062.57 per dollar as of 10:45 a.m. in Seoul, according to data compiled by Bloomberg. The Philippine peso and Taiwan’s dollar strengthened 0.2 percent to 42.20 and NT$28.968, respectively. Thailand’s baht gained 0.1 percent to 29.93.

The Purchasing Managers’ Index rose to 50.9 in August from 50.7 a month earlier, the China Federation of Logistics and Purchasing said today. A reading above 50 signals expansion. Commerce Department figures showed yesterday that orders placed with U.S. factories climbed 2.4 percent in July, compared with the 2 percent forecast of economists in a Bloomberg survey.

Inflation Control

The won advanced for a fifth day, the longest winning streak since July 4, on speculation policy makers will favor currency gains to tame the fastest inflation in three years. Consumer prices rose 5.3 percent from a year earlier in August after increasing 4.7 percent the previous month, Statistics Korea said today.

“The authorities are believed to be using the currency market to keep inflation under control,” said Ryoo Hyun Jung, chief currency dealer at Citibank Inc. in Seoul. “Around the 1,060 level, the market will see importers coming in, preventing a rapid advance.”

Taiwan’s dollar gained for a fourth day, with the currency breaching NT$29 against the U.S. currency for the first time in a week. International funds bought $214 million more of the island’s shares than they sold yesterday, according to exchange data.

“Foreign capital is flowing into the Taiwan market,” said Henry Lin, a Taipei-based foreign-exchange trader at Taiwan Shin Kong Commercial Bank. “That’s why the Taiwan dollar has broken NT$29.”

Elsewhere, Singapore’s dollar was little changed at S$1.2026 per U.S. dollar and China’s yuan was steady at 6.3788. Financial markets in Indonesia, India and Malaysia are closed today for national holidays.

--With assistance from Kim Kyoungwha and Lilian Karunungan in Singapore. Editors: Ven Ram, Anil Varma

%VND %KRW %KRW %USD %SGD %THB %PHP %TWD %IDR %MYR %HKD %CNY

To contact the reporter on this story: Khalid Qayum in Singapore at kqayum@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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