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Malaysian Ringgit Leads Asian Currency Gains as Japan Data Beats Estimates
Asian currencies rose, led by the Thai baht and Malaysia’s ringgit, on optimism regional economic growth that is outpacing Europe and the U.S. will keep luring investment from overseas.
The Bloomberg-JPMorgan Asia Dollar Index climbed toward a four-week high after Japanese government data issued today showed machinery orders and the current-account surplus beat economists’ estimates. Germany, Europe’s largest economy, reported today that exports dropped in July as the global recovery lost momentum.
“The problems in the U.S. and Europe should continue to benefit emerging-market assets,” said Lam Chee Mun, who helps manage about $200 million at TA Investment Management Bhd. in Kuala Lumpur. “Asian economies are still doing okay despite an expected slowdown.”
The baht strengthened 0.5 percent to 31.03 per dollar as of 3:41 p.m. in Bangkok, according to data compiled by Bloomberg. The ringgit appreciated 0.5 percent to 3.1125 and the Philippine peso climbed 0.5 percent to 44.26. Taiwan’s dollar rose 0.1 percent to NT$31.979 after data late yesterday showed growth in exports exceeded predictions made by economists.
Japan’s machine orders, an indicator of business investment in three to six months, increased 8.8 percent in July compared with a 1.6 percent gain a month earlier. The median forecast in a Bloomberg News survey was for a 2 percent rise.
“Strong Japanese machinery orders data out this morning allowed risk aversion to diminish in global markets,” according to a report from Credit Agricole CIB.
Fund Inflows
The ringgit and the baht traded near the highest levels in 13 years, supported by investment from abroad into stocks and bonds. The Asia Dollar Index, which tracks the region’s 10 most- active currencies outside of Japan, increased 0.2 percent. It reached 112.56 on Sept. 6, the highest level since Aug. 10.
Foreign investors owned 102 billion ringgit ($32.7 billion) of Malaysia’s local-currency debt at the end of July, 47 percent more than at the start of this year, according to data published by the central bank. Funds based abroad have plowed a net $1.9 billion into Asian shares so far this month, stock exchange data show.
Growth in developing economies in Asia will quicken to 9.2 percent this year, the International Monetary Fund said on July 7, three times faster than advanced countries. The U.S. economy may expand 3.3 percent after shrinking 2.4 in 2009, according to the Washington-based lender.
“Regional currencies are rising because of fund inflows, and we see inflows into Thailand as well,” said Disawat Tiaowvanich, a foreign-exchange trader at Bangkok Bank Pcl, the nation’s biggest lender. “Asia’s economic outlook is better than in other places like Europe and the U.S.”
Economic Recovery
Taiwan’s dollar strengthened after the government reported exports increased 27 percent from a year earlier last month, beating the median 25 percent gain forecast in a Bloomberg survey. The shipments are equivalent to more than two-thirds of the island’s gross domestic product.
“The Taiwan dollar rose largely because of the better- than-estimated export figures,” said Tarsicio Tong, a currency trader at Union Bank of Taiwan in Taipei. “The outlook for the currency largely depends on the global economic recovery because our economy is so export-driven.”
Elsewhere, South Korea’s won rose 0.3 percent to 1,172.80 against the greenback, the Singapore dollar gained 0.2 percent to S$1.3456, Indonesia’s rupiah increased 0.3 percent to 8,998 and the Indian rupee climbed 0.3 percent to 46.725.
To contact the reporters on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net; David Yong in Singapore at dyong@bloomberg.net.
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