South Korea’s won led an advance among Asian currencies as reports showed a pickup in manufacturing in the U.S. and China yesterday, brightening the outlook for regional exports to the world’s two biggest economies.
The won closed at a one-month high and Malaysia’s ringgit reached the strongest level in seven weeks as stocks indexes across Asia rose. China’s Purchasing Managers’ Index climbed to a one-year high of 53.3 in April from 53.1 in March, while the Institute for Supply Management reported U.S. factory output increased to 54.8, the highest since June. Thailand’s baht ended a five-day rally after the Bank of Thailand kept borrowing costs unchanged at its policy meeting today.
The manufacturing data were “very good for the export outlook for Asia and that tends to lift the outlook for Asian currencies,” said Sean Yokota, a Singapore-based currency strategist at UBS AG.
The won gained 0.2 percent to 1,127.45 per dollar in Seoul from April 30, according to data compiled by Bloomberg. The ringgit appreciated to 3.0268 after touching 3.0208, a level last seen on March 13. Taiwan’s dollar closed little changed at NT$29.24 after hitting an eight-month high of NT$29.08.
The MSCI Asia-Pacific Index (MXAP) of shares rose 0.5 percent as stock exchange data showed foreign investors were net buyers of equities in Indonesia, South Korea, Philippines, Taiwan, and Thailand in April. Most Asian markets were closed yesterday for public holidays.
“With the U.S. and Chinese manufacturing data, the overall atmosphere is favorable for the won,” Lee Yong Hee, a Seoul- based currency dealer at Industrial Bank of Korea, said before today’s release of a separate output index for China. “We see more exporters selling the dollar than importers buying.”
HSBC Holdings Plc and Markit Economics reported the purchasing managers’ index of Chinese factory production increased to 49.3 in April, compared with a preliminary reading of 49.1 on April 23 and a final 48.3 in March. A level of 50 is the dividing line between expansion and contraction.
China’s yuan gained the most in two weeks before a Sino-U.S. strategic economic dialogue in Beijing tomorrow that may include discussions on whether the Chinese currency is undervalued. It appreciated 0.05 percent to 6.3070 per dollar in Shanghai.
The baht fell 0.3 percent to 30.84 against the U.S. currency in Bangkok, versus 30.75 on April 30, according to data compiled by Bloomberg. The Bank of Thailand kept its benchmark one-day repurchase rate at 3 percent, as predicted by all 18 economists in a Bloomberg News survey.
Elsewhere, Indonesia’s rupiah dropped 0.1 percent to 9,199 per dollar and the Philippine peso rose 0.1 percent to 42.190. India’s rupee declined 0.3 percent to 52.89.
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