Asia Currencies Gain as Greece, Improved U.S. Economic Data Buoys Optimism

Asian currencies gained yesterday, rebounding from a decline earlier in the week, as improved U.S. economic data and optimism Greece will secure a second bailout buoyed demand for emerging-market assets.

The Bloomberg-JPMorgan Asia Dollar Index (ADXY) rose 0.1 percent in the week as a report showed jobless claims in the world’s largest economy fell to a four-year low. European governments are considering steps including interest-rate cuts on emergency loans to Greece as part of a rescue package, two people familiar with the talks said on Feb. 16. The gauge for regional currencies lost as much as 0.3 percent earlier in the week after euro-area finance ministers delayed a decision on the second bailout for Athens.

“The Greek situation was fragile earlier this week and that gave investors selling opportunities,” said Shigehisa Shiroki, chief trader on the Asian and emerging-markets team at Mizuho Corporate Bank Ltd. in Tokyo. “Ultimately, Europe won’t let Greece default and will probably provide a second bailout. Funds will continue to flow into Asia and regional currencies will remain on a gradual appreciation trend.”

Malaysia’s ringgit jumped 0.8 percent yesterday to 3.0363 per dollar, erasing the week’s losses, according to data compiled by Bloomberg. The South Korean won climbed 0.6 percent yesterday to 1,125.50 and Indonesia’s rupiah rose 0.5 percent to 9,046, both trimming the week’s losses to 0.2 percent.

Wrangling among euro-area finance ministers on a Feb. 15 conference call over how to reduce Greece’s debt load and tighten control of the aid raised the prospect of a two-step process, according to two people familiar with the talks. In that scenario, the ministers’ Feb. 20 gathering in Brussels would be limited to kicking off the bond exchange and deferring decision on the rest of the bailout funds.

U.S. Data

The won climbed the most in more than two weeks yesterday after official data showed on Feb. 16 that Americans filed the fewest claims for jobless benefits since March 2008 in the week ended Feb. 11, while housing starts rose in January at a faster pace than economists expected.

“Interpretations about the Greek situation have changed again to a more positive view, and improved data in the U.S. are also supporting sentiment,” said Hwang Sun Min, a Seoul-based currency dealer at Kookmin Bank. “Investors may refrain from taking strong positions at the end of the week.”

The ringgit dropped for a second week after data on Feb. 15 showed economic growth last year slowed to 5.1 percent from 7.2 percent in 2010. Singapore reported the following day its economy shrank an annualized 2.5 percent in the fourth quarter of 2011 from the previous three months, less than an initial estimate of a 4.9 percent decline. The island-state is Malaysia’s second-largest export market.

Elsewhere, the Philippine peso weakened 0.3 percent this week to 42.628 per dollar, Taiwan’s dollar declined 0.1 percent to NT$29.583 and China’s yuan ended little changed at 6.2991, according to data compiled by Bloomberg. Thailand’s baht added 0.2 percent from a week ago to 30.78 and India’s rupee climbed 0.3 percent to 49.275.

To contact the reporter on this story: Yumi Teso in Bangkok at yteso1@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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