Asian Currencies Halt Slide as Ringgit to Peso Lead Weekly Gains

Asian currencies completed their best week in two months, led by the Philippine peso and Malaysia’s ringgit, as improvements in U.S. economic data eased concern that global growth is slowing.

The Bloomberg JPMorgan-Asia Dollar Index (ADXY) halted a three-week slide to advance 0.3 percent after reports showed U.S. jobless claims fell more than economists estimated and the nation’s services industry expanded. Emerging-market currencies had their worst start to a year since 2008 following a rout in Turkey’s lira and a devaluation in Argentina’s peso as the Federal Reserve pressed ahead with a plan to slow the pace of its monthly bond purchases by $10 billion.

“The selloff is clearly overdone, and there’s a need to distinguish the good and bad ones within the EM bloc,” said Roy Teo, a Singapore-based currency strategist at ABN Amro Bank NV. “The recovery remains fragile given the headwinds from Fed tapering concerns.”

The peso climbed 0.7 percent to 44.99 per dollar in Manila, according to Tullett Prebon Plc prices. Thailand’s baht added 0.7 percent to 32.795, while the ringgit advanced 0.4 percent to 3.33 versus the greenback, according to data compiled by Bloomberg. Indonesia’s rupiah strengthened 0.4 percent to 12,160. Malaysia and Indonesia’s markets were shut Jan. 31 for the Lunar New Year holiday.

China’s yuan, which resumed trading today after a week-long break, fell to 6.0634 per dollar versus 6.06 on Jan. 30. The 12-month non-deliverable yuan forwards gained 0.1 percent this week to 6.1167 per dollar in Hong Kong. South Korea’s won closed at 1,074.45, 0.6 percent stronger than its Jan. 31 close in offshore trading, and weaker than its Jan. 29 onshore close at 1,070.03. Korean markets were shut Jan. 30-31.

China, India

China’s non-manufacturing PMI index was at 50.7 in January, compared with a 50.9 reading for December, HSBC Holdings Plc and Markit Economic said today. Manufacturing in Singapore expanded last month and Indonesia’s fourth-quarter economic growth exceeded analysts’ forecasts.

A gauge tracking manufacturing in India climbed to 51.4 from 50.7, according to a Feb. 3 report from HSBC and Markit. A preliminary government estimate today may show India’s economy expanded by 4.7 percent in the year ending March 31, versus 4.5 percent a year earlier. The rupee appreciated 0.4 percent to 63.3862 per dollar.

The rupiah advanced after Bank Indonesia said the nation’s current-account shortfall likely narrowed below 2 percent of gross domestic product last quarter, from 3.8 percent in the previous period. Foreign reserves exceeded $100 billion in January for the first time since May, official data showed.

Emerging Turmoil

Investors pulled $10 billion from emerging Asia equity funds and about $4.9 billion from developing-nation bond funds in the four weeks through Feb. 5, Australia & New Zealand Banking Group Ltd. reported, citing EPFR Global data.

The ringgit touched the weakest level since May 2010 on Feb. 4, while the Philippine peso revisited its August 2010 low the same day and the won reached the lowest since Sept. 13.

Thailand’s currency has lost 4.5 percent in the past three months as anti-government demonstrators blocked parts of Bangkok to force Prime Minister Yingluck Shinawatra from office. The baht had its best week since October after last weekend’s election didn’t trigger major violence.

Elsewhere in Asia, Taiwan’s dollar weakened 0.1 percent to NT$30.406 versus the greenback from Jan. 29, while Vietnam’s dong weakened 0.2 percent to 21,105.

To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net

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

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