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Asian Currencies Advance as Manufacturing Data Suggest Economic Resilience
Asian currencies rose, led by Malaysia’s ringgit, after economic data showed two of the region’s largest economies were proving resilient to slowing global growth, boosting demand for emerging-market assets.
The MSCI Asia-Pacific Index of stocks rallied 1.2 percent after a purchasing managers’ index in India had the highest reading in six months in December and a similar gauge in China rose last month. Financial markets in China and Thailand are closed for holidays today.
“Asian manufacturing data and stock market gains are supporting some risk appetite,” said Byeon Ji Young, a Seoul- based currency analyst at Woori Futures Co. “Still, this sentiment won’t last long as investors are concerned over Europe’s debt.”
The ringgit strengthened 0.7 percent to 3.1480 per dollar as of 4:06 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. South Korea’s won advanced 0.4 percent to 1,150.82, Singapore’s dollar rose 0.6 percent to S$1.2902 and the Philippine peso gained 0.4 percent to 43.76.
The Indian purchasing managers’ index climbed to 54.2 from 51 in November, HSBC Holdings Plc and Markit Economics said in an e-mailed statement yesterday. In China, the index was at 50.3 from 49 the month before, the Beijing-based logistics federation said in a statement on Jan. 1. A reading of more than 50 indicates expansion.
Offshore Yuan Surges
Malaysia’s ringgit reached a three-week high on speculation global funds will add to their holdings of the nation’s assets. The value of local-currency debt held (MAFDTOTL) by overseas investors was 169.1 billion ringgit ($54 billion) in November, Bank Negara Malaysia said on its website last week. That’s a 40 percent increase since the end of 2010.
“With the Asian economies showing improvement, global investors will want to place their funds in this region,” said Akira Banno, a treasury adviser at Bank of Tokyo-Mitsubishi UFJ Bhd. in Kuala Lumpur.
China’s yuan strengthened 0.4 percent to 6.3188 per dollar in offshore trading in Hong Kong as a non-manufacturing purchasing managers’ index rose to 56 in December from 49.7 in November, according to the National Bureau of Statistics and the Federation of Logistics and Purchasing.
Singapore’s dollar gained even as a government report today showed the country’s economy (SGDYTY) shrank an annualized 4.9 percent in the fourth quarter of 2011 from the previous three months. The median of 11 estimates in a Bloomberg News survey was for a 5 percent contraction. The economy grew 4.8 percent in 2011 and may expand 1 percent to 3 percent this year, Prime Minister Lee Hsien Loong said Dec. 31.
Indonesia Growth Concern
“As the economic woes in developed economies continue to unfold, small and open economies such as Singapore are probably most at risk,” economists led by David Carbon, head of economic and currency research at DBS Group Holdings Ltd. in Singapore, wrote in a note to clients today. “Overall, growth in Asia this year will be slower, led by a soft landing in China.”
Indonesia’s rupiah dropped the most in more than a month after data yesterday showed exports rose 8.3 percent in November from a year earlier, the least since September 2009. The currency weakened 1 percent to 9,170 per dollar, according to prices from local banks compiled by Bloomberg.
Elsewhere, Taiwan’s dollar and India’s rupee climbed 0.1 percent to NT$30.294 per dollar and 53.235, respectively. Vietnam’s dong was little changed at 21,030.
-- With assistance from Elffie Chew in Kuala Lumpur. Editors: Andrew Janes, Anil Varma
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