Bloomberg News

Asia Currencies Rise as U.S. Recovery May Spur Exports

April 27, 2012

Asian currencies had a weekly gain, led by Malaysia’s ringgit, as upbeat U.S. economic data brightened the outlook for regional exports and prompted investors to favor riskier assets.

Home sales in the world’s biggest economy were the highest in almost two years in March, according to a report April 26, and Federal Reserve Chairman Ben S. Bernanke said April 25 the central bank was prepared to add more stimulus if needed. South Korea’s gross domestic product increased in the first quarter at the fastest pace in a year and the nation’s current-account surplus reached a four-month high in March, central bank reports showed April 26 and yesterday.

Malaysia’s ringgit strengthened 1.1 percent this week to 3.0315 versus the greenback in Kuala Lumpur, its best performance in three months, according to data compiled by Bloomberg. Taiwan’s dollar advanced 0.6 percent to NT$29.332 in Taipei and South Korea’s won appreciated 0.4 percent to 1,135.10. India’s rupee weakened 0.9 percent to 52.5425 as Standard & Poor’s lowered the outlook on its credit rating for the nation.

“It looks like the U.S. economy is recovering; that boosts optimism in the market,” said Samson Tu, a Taipei-based fund manager at Uni-President Assets Management Corp., who helps oversee $1.6 billion of fixed-income securities. “The flows into emerging sovereign bonds have been very active lately.”

Funds focused on emerging-market bonds attracted $14.4 billion in the first quarter of this year, compared with $1.9 billion in the year-earlier period, according to data from U.S. research company EPFR Global.

Spain Downgrade

Asia’s currency gains were limited by concern Europe’s debt crisis is worsening. S&P cut Spain’s sovereign-credit rating April 26 for the second time this year, citing concern that the government will have to provide further fiscal support to banks as the economy contracts.

The downgrade “won’t be enough to weaken the won,” said Byeon Ji Young, a Seoul-based currency analyst at Woori Futures Inc. “The overall atmosphere is positive for the won with Bernanke’s comments still affecting markets and Korea’s current account improving.”

The won completed its biggest weekly gain in almost two months as data showed yesterday that the current-account surplus was $3 billion in March, up from $557 million in February. Gross domestic product rose 0.9 percent in the first quarter from the previous three months, according to figures released April 26.

Export Outlook

The ringgit rose for a fourth day, its longest winning streak in 12 weeks. Malaysia’s exports increased 15 percent from a year earlier in February, the biggest gain in four months, according to data released April 10.

“U.S. employment and housing are gradually improving so spending is on the rise and we expect Malaysian exports to pick up,” said Akira Banno, a treasury adviser at Bank of Tokyo- Mitsubishi UFJ Bhd. in Kuala Lumpur.

Elsewhere, the Philippine peso climbed 0.6 percent this week to 42.368 per dollar, Thailand’s baht advanced 0.4 percent to 30.77 and China’s yuan was little changed at 6.3102. Indonesia’s rupiah was little changed at 9,185 and Vietnam’s dong dropped 0.3 percent to 20,890.

To contact the reporters on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net; Andrea Wong in Taipei at awong268@bloomberg.net

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


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