Asian Currencies Strengthen, Paring Weekly Declines, on U.S. Jobs Data

Asian currencies strengthened, paring weekly declines, after a government report showed jobless claims in the U.S. fell to the lowest level since 2008, buoying the region’s export outlook.

India’s rupee led gains as the Bloomberg-JPMorgan Asia Dollar Index rose 0.4 percent yesterday, trimming the week’s drop to 0.4 percent. The number of applications for unemployment payments in the U.S. dropped to 366,000 in the week ended Dec. 10, lower than was forecast by any of 47 economists surveyed by Bloomberg. India announced measures to curb speculation in the currency market, while Fitch Ratings upgraded Indonesia’s credit ranking to investment grade of BBB-.

“The U.S. data supported some risk-taking sentiment, but we’re still walking on thin ice as bad news from Europe may come out anytime,” said Lee Jung Hyun, a Seoul-based currency dealer at Industrial Bank of Korea.

The rupee jumped 1.7 percent to 52.7450 per dollar in Mumbai, the biggest gain since May 2010, according to data compiled by Bloomberg. The Philippine peso rose 0.7 percent to 43.830, paring this week’s loss to 0.5 percent. China’s yuan climbed 0.4 percent to 6.3484 and was up 0.3 percent for the week. The South Korean won strengthened 0.4 percent to 1,158.73, trimming its weekly drop to 1 percent.

The MSCI Asia-Pacific Index (MXAP) of stocks gained 0.8 percent yesterday and was down 2.4 percent for the week. Christine Lagarde, the managing director of the International Monetary Fund, said on Dec. 15 Europe’s debt crisis is growing to the point where it won’t be solved by one group of countries.

Decisive Measures

The rupee strengthened as much as 2.7 percent yesterday after the Reserve Bank of India said companies can’t enter into multiple forward contracts to cover a single overseas transaction. It pared gains as the monetary authority, which has raised interest rates 13 times since the start of 2010 to cool inflation, kept them unchanged at a policy review in Mumbai.

“The RBI has taken decisive measures to reduce onshore speculation against the rupee,” said Olivier Desbarres, head of foreign-exchange strategy for Asia-Pacific ex-Japan at Barclays Capital in Singapore. “These measures have certainly caught the market’s attention and it reduces the chances of a rapid weakening of the rupee.”

Indonesia’s rupiah gained 0.6 percent to 9,035 and was up 0.5 percent for the week after the upgrade, which was announced late Dec. 15. The currency advanced as much as 0.9 percent earlier, touching a one-week high.

“The country will now attract a broader range of investors, giving the government and corporates more funding sources,” said Enrico Tanuwidjaja, a currency strategist at Malayan Banking Bhd. in Singapore. It should make the rupiah stronger, he said.

China Easing Curbs

The yuan strengthened the most in two months as signs credit curbs are easing bolstered optimism policy makers will avoid a sharp slowdown in the world’s second-largest economy. The People’s Bank of China set its daily reference rate 0.1 percent stronger at 6.3352 per dollar, after fixing it weaker for three days.

“The fixing was firmer and at market open there was solid dollar offer interest, in particular by Chinese banks,” said Dariusz Kowalczyk, a Hong Kong-based senior strategist at Credit Agricole CIB. “Improved sentiment in global markets is helping as is news that China is easing curbs in the property sector which will limit downside risks to growth.”

Elsewhere, Malaysia’s ringgit advanced 0.4 percent yesterday to 3.1778 per dollar and was down 0.8 percent for the week, according to data compiled by Bloomberg. Taiwan’s dollar was little changed at NT$30.369 and dropped 0.4 percent this week. Thailand’s baht was up 0.1 percent at 31.34 and declined 1.3 percent this week.

To contact the reporter on this story: 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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