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Won Leads Asian Currency Gains on Buoyant Manufacturing, Export Growth
Asian currencies gained, led by South Korea’s won and Thailand’s baht, on optimism manufacturing and export growth in regional economies will spur global funds to buy more emerging-market assets.
The Bloomberg-JPMorgan Asia Dollar Index climbed the most in two weeks and regional stocks rose as a government-backed survey showed manufacturing in China grew at a faster pace last month. The won had its biggest gain since June 21 as overseas shipments accelerated in August. The baht traded at its strongest level since March 2008 after the central bank said its 6.8 percent appreciation this year won’t hurt businesses.
“Today’s data border on the positive side,” said S. Jegathesan, a foreign-exchange trader at EON Capital Bhd. in Kuala Lumpur. “The question remains if they are going to be sustainable.”
The won advanced 1.2 percent to 1,184.78 per dollar at the 3 p.m. close in Seoul, according to data compiled by Bloomberg. The baht gained 0.4 percent to 31.17 and Malaysia’s ringgit rose 0.5 percent to 3.1330 to extend a three-month rally. India’s rupee gained 0.4 percent to 46.8900.
Exchange data show overseas investors pumped $3 billion into stocks in India, Indonesia and Thailand in August after the International Monetary Fund said on July 7 that developing economies in Asia will expand 9.2 percent in 2010, outpacing growth of 2.6 percent in advanced countries.
‘Appreciation Pressure’
The won rebounded from a 1.3 percent slide last month as the Ministry of Knowledge Economy said today exports in August increased 29.6 percent from a year earlier after expanding a revised 28.3 percent in July. The government forecast a trade surplus of $32 billion for 2010, compared with a previous estimate of $20 billion. Overseas investors have pumped $7.1 billion into South Korean shares so far this year, with the benchmark index advancing 4.9 percent.
“Growth in exports is high and the Korean stock market is strong,” said Peter Park, a fixed-income analyst at Woori Investment & Securities in Seoul. “It drives appreciation pressure on the won.”
The ringgit gained as China’s Purchasing Managers’ Index rose to 51.7 from 51.2 in July. A similar gauge tracked by HSBC Holdings Plc showed output expanded, following a contraction in July. China, including Hong Kong, is Malaysia’s biggest export market.
Central Bank’s Stance
Fifteen of 17 economists forecast that Bank Negara Malaysia will keep its overnight rate at 2.75 percent at a policy meeting tomorrow to support recovery. Two predicted a rise to 3 percent, following three increases this year.
The baht extended August’s 3.1 percent gain, its best month since February 2008, as a central bank report yesterday showed factory output rose more than economists estimated in July. DBS Group Holdings Ltd. today raised its 2010 economic growth forecast for Thailand to 9 percent from 8 percent.
The baht’s strength isn’t a major obstacle for businesses and its volatility is lower than that of other regional currencies, Mathee Supapongse, the central bank’s director for domestic economy, said yesterday.
“There is strong optimism over the Thai economic outlook and that helps to increase fund inflows, putting appreciation pressure on the baht,” said Minori Uchida, senior analyst in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd. The central bank seems to be “more tolerant with gains,” he said.
Elsewhere, the Philippine peso gained 0.6 percent to 45.095 per dollar and the Singapore dollar climbed 0.3 percent to S$1.3517. Indonesia’s rupiah appreciated 0.4 percent to 9,008 and the Chinese yuan weakened 0.1 percent to 6.8107, following its worst month since 1994 in August.
To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net
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