Bloomberg News

Philippine Peso Leads Advances in Asia This Week on GDP Growth

August 29, 2014

The Philippine peso led this week’s gains in Asian currencies after the nation’s economic growth beat forecasts.

The Bloomberg JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies outside Japan, rose 0.2 percent from Aug. 22. The peso climbed 0.6 percent to 43.597 against the dollar in Manila yesterday and South Korea’s won added 0.4 percent.

The Philippine economy grew 6.4 percent in the second quarter from a year earlier, official data showed Aug. 28, topping the median estimate for a 6.1 percent gain in a Bloomberg survey. The Bank of Korea reported a $7.91 billion current-account surplus for July.

“Asian currencies have been doing well because of superior growth and solid external positions,” said Dariusz Kowalczyk, a Hong Kong-based strategist at Credit Agricole CIB. “We are well positioned to outperform other emerging markets,” he said, adding that he expects the currencies of China, Taiwan, Philippines and Malaysia to rise in the second half.

The ringgit climbed 0.3 percent this week to 3.1520, and gained 1.39 percent in August, the best performance among 24 emerging-market exchange rates tracked by Bloomberg. The Malaysian currency completed its longest run of monthly gains since 2012 on bets the central bank will raise interest rates next month.

Korea, China

The won rose to 1,013.88 per dollar this week, taking gains for August to 1.37 percent. It reached 1,012.95 on Aug. 28, the strongest level since July 10, and rose 0.1 percent yesterday.

South Korea’s factory output increased 3.4 percent in July from a year earlier, exceeding the 2.3 percent gain forecast by economists and June’s 0.4 percent pace, data showed yesterday. Separate figures revealed manufacturers’ confidence fell to 74 in September, the worst reading since August, 2013.

The yuan rose 0.16 percent from Aug. 22 to 6.1432 per dollar in Shanghai, China Foreign Exchange Trade System prices show, taking its monthly gains to 0.5 percent on optimism about capital inflows.

The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., has attracted a net $518 million in August, putting it on track for the biggest monthly inflow since December 2012. The official Purchasing Managers’ Index (CPMINDX) for manufacturing was at 51.1 for August, from 51.7 in the previous month, according to a median estimate before data due Sept. 1. A reading above 50 indicates expansion.

Elsewhere in Asia, Taiwan’s dollar strengthened 0.2 percent for the week to NT$29.97 against the greenback in Taipei. India’s rupee fell 0.1 percent to 60.515 on Aug. 28, while Indonesia’s currency declined 0.1 percent to 11,694. Thailand’s baht and Vietnam’s done were steady this week at 31.94 and 21,195, respectively. Financial markets in India were closed yesterday for a public holiday.

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

To contact the editors responsible for this story: Amit Prakash at aprakash1@bloomberg.net Andrew Janes


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