Bloomberg News

Asian Currencies: Yuan, Peso Advance on U.S. Recovery Signs

April 17, 2012

China’s yuan, Taiwan’s dollar and the Philippine peso led gains among Asian currencies after stronger economic data out of the U.S. countered concern Europe’s sovereign-debt crisis will hurt global growth.

The yuan gained the most in three weeks as the central bank strengthened its reference rate today, a day after widening the currency’s trading band. U.S. retail sales rose 0.8 percent in March from the previous month, more than double the increase estimated by economists in a Bloomberg survey, government data showed yesterday. India’s rupee advanced as the central bank cut borrowing costs more than forecast to spur economic growth.

“The U.S. data boosted market sentiment as some people hope that China’s exports could get a helping hand from a stronger U.S. economy,” said Banny Lam, a Hong Kong-based economist at CCB International Securities Ltd.

The yuan rallied 0.29 percent to 6.2966 per dollar as of 3:55 p.m. in Shanghai, according to China Foreign Exchange Trade System. The peso climbed 0.3 percent to 42.65, Taiwan’s dollar rose 0.2 percent to 29.506 and the rupee gained 0.2 percent to 51.564.

U.S. retail sales increased 0.8 percent in March, beating the median estimate for a 0.3 percent gain in a Bloomberg survey. A separate report showed manufacturing in the New York region expanded in April at the slowest pace in five months. The People’s Bank of China widened the yuan band to 1 percent from 0.5 percent yesterday, the first time since May 2007.

Remittances Growth

The rupee advanced from near a three-month low as the Reserve Bank of India cut the repurchase rate by 50 basis points to 8 percent today. The median forecast of economists in a Bloomberg News survey was for a reduction to 8.25 percent.

The peso approached a two-week high after a central bank report showed remittances grew 5.8 percent from a year earlier to $1.59 billion in February, compared with a 5.4 percent advance in January. Exports increased 14.6 percent in February, the most in 10 months, data showed last week.

“We remain quite positive on the peso,” said Goh Puay Yeong, a Singapore-based strategist at Credit Suisse Group AG. “Part of the reason is that the recovery in Philippine exports and remittances continues to be pretty robust.”

Taiwan’s dollar rose the most in two weeks on speculation the central bank will tolerate appreciation to help damp inflation as Taiwan Power Co. prepares to raise electricity tariffs to compensate for higher fuel costs. Policy makers may allow faster rises in the overnight rate and the local dollar, the Commercial Times reported today, citing an unidentified monetary official.

South Korea’s won closed 0.2 percent weaker at 1,140.56 and Malaysia’s ringgit was steady at 3.0655. Indonesia’s rupiah pared a decline to trade little changed at 9,178. Thailand’s baht and Vietnam’s dong were also little changed at 30.80 and 20,825, respectively.

To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net;

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


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