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Won, Ringgit Lead Weekly Advance in Asia as Funds Bet on Growth Prospects
South Korea’s won and Malaysia’s ringgit led weekly gains among Asian currencies on signs global investors are seeking higher returns in emerging markets because of their faster economic growth.
Asian equities and emerging-market debt attracted more fund inflows last week as investors withdrew money from developed- market stocks, according to research company EPFR Global. Federal Reserve Chairman Ben S. Bernanke, who has kept benchmark rates near zero since December 2008, said July 21 U.S. policy makers are prepared to take steps to aid growth because of an “unusually uncertain” outlook.
“The comments on the U.S. economic outlook will support risk-taking momentum and demand for higher yields,” said Godwin Chan, a trader in Kuala Lumpur at OSK Investment Bank Bhd.
The won rose 0.5 percent this week to 1,196.85 per dollar as of 1:49 p.m. in Seoul, according to data compiled by Bloomberg. The ringgit appreciated 0.2 percent to 3.2025 in the week.
The Bloomberg-JPMorgan Asia Dollar Index has climbed 0.3 percent in the past five days as the MSCI Asia Pacific Index of regional equities headed for third straight weekly advance. Developing economies in Asia will expand 9.2 percent in 2010 compared with 2.6 percent for advanced countries, the International Monetary Fund said on July 7.
South Korea
A report next week will probably show South Korea’s economy grew for a sixth straight quarter. Gross domestic product, the fourth largest in Asia, grew 1.3 percent in the second quarter from the prior three months, according to the median of seven estimates in a Bloomberg News survey before data due on July 26.
“Any currency belonging to a country with rising growth is attractive relative to the U.S. dollar,” said Douglas Borthwick, Connecticut-based managing director and head of trading for Faros Trading LLC.
Taiwan’s dollar, which is little changed for the week, gained 0.2 percent to NT$32.118 today. Foreign investors have pumped $811.5 million into the Taiwan stock market this month, according to stock exchange data. Government data today will show factory output rose 22 percent in June from a year earlier, gaining for the 10th straight month, according to the median estimate in a Bloomberg Survey of economists.
United Parcel Service Inc. and AT&T Inc. increased their profit forecasts yesterday, bolstering optimism for corporate earnings in the U.S., Taiwan’s second-largest overseas market.
“Hot money is pouring into the stock market,” said Eric Hsing, a debt trader at First Securities Inc. in Taipei. “The central bank will continue to slow the Taiwan dollar’s growth to keep its edge on exports.”
Indian Rupee
The Indian rupee climbed 0.3 percent to 47.02 per dollar, paring its loss for the week to 0.5 percent, after the EPFR report showed investors poured money into equity funds focused on India and China in the week ended July 21. India funds received a net $187 million, the most in 51 weeks, while China money managers took in $138 million, EPFR said. Funds investing in stocks in Asia excluding Japan got more than $800 million for the second week in a row, it said.
Thailand’s baht strengthened 0.1 percent to 32.26 per dollar, paring its weekly loss, on speculation foreign funds are flowing into Thailand and after increased profit outlook by U.S. companies eased concern the global economic recovery is faltering.
Elsewhere, Indonesia’s rupiah and Philippine peso are little changed for the week at 9,051 and 46.395 against the dollar, respectively.
To contact the reporter on this story: Khalid Qayum in Singapore at kqayum@bloomberg.net;
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