Asian Currencies Advance, Led by Won, as U.S. Data Boost Export Outlook
Asian currencies advanced, led by South Korea’s won, as U.S. economic data over the weekend spurred optimism that the region’s export-led growth is intact.
The MSCI Asia-Pacific Index (MXAP) of shares rose by the most in three weeks after retail sales in the U.S. over the Thanksgiving weekend surged 16 percent to a record. The won snapped a six-day drop before a report on Dec. 1 that will show South Korean export growth accelerated, according to the median forecast of economists in a Bloomberg survey.
“Investors are reacting to the U.S sales data,” said Yun Se Min, a Seoul-based currency trader at Busan Bank. “Increasing consumption is good news for Korea’s export- oriented economy.”
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, rose 0.2 percent to 114.65 as of 4:16 p.m. in Hong Kong. The won climbed 0.9 percent to 1,154.35 per dollar, India’s rupee advanced 0.6 percent to 51.9362 and the Philippine peso gained 0.4 percent to 43.78, according to data compiled by Bloomberg.
The Italian newspaper La Stampa said in an unsourced report yesterday that the International Monetary Fund is preparing a 600 billion euro ($799 billion) loan for Italy. An IMF official said today that the Washington-based lender isn’t in talks with Italy about a loan program for the debt-laden country.
Export Forecast
The won rebounded from a six-week low as manufacturers’ confidence for December rose to 83 from 82 in November, according to central bank data released today. Exports rose 10.4 percent in November from a year earlier, after having grown a revised 8 percent in October, according to the median forecast of economists in the Bloomberg survey.
India’s rupee rebounded from a slide last week on optimism policy makers will unveil additional measures to stem losses. The nation’s central bank removed a $100 million limit on net foreign-currency sales via swaps on Nov. 23. Companies borrowing abroad can now pay as much as 3.5 percentage points over the London Interbank Offered Rate for loans longer than three years and up to five years, raising the cap by 50 basis points.
The Philippine peso halted a three-day slide on speculation the government will increase spending to boost domestic growth. The nation’s economy grew 3.2 percent in the third quarter, compared with a revised 3.1 percent pace in the preceding three months and below the 4.1 percent forecast by economists surveyed by Bloomberg, a report showed today.
Inflation Outlook
The yuan declined to its weakest level in a month on speculation China will slow the pace of appreciation to protect its exporters as inflation cools. The yuan fell 0.15 percent to 6.3846 per dollar and touched 6.3871, the weakest level since Oct. 21, according to the China Foreign Exchange Trade System.
Increases in consumer prices are expected to moderate in the last two months of the year, Shanghai Securities News reported today, citing Yu Bin, a researcher from the State Council’s Development Research Center. The yuan may be “near its equilibrium” following a decline in the nation’s foreign- exchange reserves, Li Yang, a former central bank adviser, said on Nov. 26.
“There is less need for China to strengthen the yuan to lower import prices as inflation is easing,” said Banny Lam, a Hong Kong-based economist at CCB International Securities Ltd., a unit of China’s second-largest lender. “The worsening economic outlook may also steer officials toward protecting exports.”
Elsewhere, Thailand’s baht gained 0.3 percent to 31.33 per dollar while the Taiwan dollar was little changed at NT$30.452. Indonesia’s rupiah dropped 1.6 percent to 9,200, according to prices from local banks compiled by Bloomberg. Financial markets in Malaysia were closed for a public holiday.
To contact the reporters on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net; Jiyeun Lee in Seoul at jlee1029@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net
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