Bloomberg News

Asian Currencies Climb to Seven-Month High on U.S. Jobs Report

October 04, 2012

Asian currencies climbed to a seven- month high after a report showed U.S. jobs rose more than economists estimated, tempering concern about a global slowdown and bolstering appetite for riskier assets.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s most-active currencies, touched 117.43, the highest since March. India’s rupee rose to a level not seen since April and the Philippine peso reached its strongest in more than two weeks after data showed American employers added 162,000 jobs last month, topping the median forecast of 140,000 by economists surveyed by Bloomberg News. The European Central Bank meets today to discuss ways to contain the region’s debt turmoil.

“Sentiment was boosted by the decent U.S. data, which suggests the recovery may be gaining some traction,” said Frances Cheung, a strategist at Credit Agricole CIB in Singapore. “However, price action so far is still muted ahead of the ECB meeting tonight.”

The rupee jumped 0.7 percent to 51.8175 per dollar in Mumbai, according to data compiled by Bloomberg. It touched 51.7375, the strongest level since April 19. The Philippines peso gained 0.3 percent to 41.467, after touching 41.465, the strongest since Sept. 17. The Malaysian ringgit appreciated 0.2 percent to 3.0538.

Asian stocks rose after services industries in the world’s largest economy grew by the most in six months, according to the Institute for Supply Management’s non-manufacturing index. Growth in Asia excluding Japan will accelerate to 7.3 percent in 2013 from 6.3 percent this year, HSBC Holdings Plc’s Hong Kong- based economists Qu Hongbin and Frederic Neumann wrote in a note released today.

Global Stimulus

The ECB unveiled a plan last month for unlimited buying of government bonds, after which the Federal Reserve and the Bank of Japan (8301) expanded their asset-purchase programs. The Fed announced on Sept. 13 it will start open-ended purchases of $40 billion of mortgage debt per month, in a third round of so- called quantitative easing.

“Following the QE3, any labor market data going forward will affect” the peso, said Saktiandi Supaat, head of foreign- exchange research at Malayan Banking Bhd. (MAY) in Singapore. “Overall, there’s a slight improvement in risk-taking.”

The baht touched a seven-month high as data from the Thai Bond Market Association showed global investors bought $304 million more government notes than they sold in the first three days of this week. The currency increased 0.3 percent to 30.57 after rising to 30.56 earlier, the highest since March 9.

China Tourism

The ringgit gained after Malaysia’s Prime Minister Najib Razak said in an interview with CNBC today that policy makers are trying to develop a “very strong” domestic economy and create more “growth industries.”

China’s tourism data from the Golden Week holiday that started Oct. 1 supported bets that the economy is headed for a soft landing, Lu Ting, a China economist at Bank of America Merrill Lynch, wrote in a report today, saying worries over a hard landing were ‘overdone.’

Tourist attractions’ sales in Asia’s biggest economy rose 25 percent from a year earlier, according to the report. Financial markets in China are closed this week.

“We expect China data to improve this month and next month as some of the fiscal spending kicks in,” said Cliff Tan, a strategist at Bank of Tokyo-Mitsubishi UFJ in Hong Kong. “That will be enough to drive Asian currencies stronger.”

Elsewhere, Indonesia’s rupiah and Taiwanese dollar were little changed at 9,587 per dollar and NT$29.388, respectively, and the South Korean won weakened to 1,113.75 from 1,112.68 on Oct. 2. Financial markets in Seoul were closed yesterday for a holiday. Vietnam’s dong was steady at 20,890.

To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.


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