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Baht Leads Asian Currencies Higher This Week as Data Improves

Asian currencies gained this week, led by the Thai baht’s advance to an eight-month high, as improving economic data in the region spurred capital inflows.

Manufacturing in China, the world’s second-biggest economy, expanded in July by the most since January 2013 and Taiwan’s export orders in June had the biggest increase in 17 months, reports indicated this week. Global funds bought $2.3 billion more of Thailand’s bonds than they sold in the last five days, set for the largest net weekly purchases since September. The nation’s stocks also drew funds, as did equities in India, Indonesia, South Korea and Taiwan, exchange figures show.

“We’re starting to see slightly better data out of Asia,” said Callum Henderson, Singapore-based global head of foreign-exchange research at Standard Chartered Plc. “Expectations for a China macroeconomic stabilization have increased on the back of second-quarter GDP and flash PMI data.”

The Bloomberg-JPMorgan Asia Dollar Index (ADXY), which tracks the region’s 10 most-active currencies excluding the yen, rose 0.14 percent from July 18. The baht rallied 0.9 percent to 31.850 per dollar, advancing for a fifth week. The Philippine peso gained 0.5 percent to 43.285 and India’s rupee strengthened 0.3 percent to 60.1050. China’s yuan climbed 0.3 percent to 6.1915.

China, Thailand

China’s preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was at 52.0 in July, the highest in 18 months, according to a July 24 report. Gross domestic product grew 7.5 percent in the April-June period from a year earlier, the statistics bureau said July 16, beating the 7.4 percent median estimate in a Bloomberg survey.

The baht reached an eight-month high of 31.740 per dollar on July 23 on optimism the military junta, which seized power in a May 22 coup, will revive growth. The National Council for Peace and Order, a group of military leaders, has approved factory licenses and investment projects as well as a new fiscal budget which will help “jump start” the economy, Pridiyathorn Devakula, an adviser to the council, said July 21.

“Large money inflows in the domestic bond market have accelerated the baht’s strengthening,” Kampon Adireksombat, an economist at Tisco Securities Co. in Bangkok, said by phone. “Most investors are very optimistic about the Thai economic outlook from the government’s investment policies.”

Philippine Surplus

The Philippine peso rose on speculation the nation’s strengthening external finances will spur debt inflows. The country’s balance of payments position will improve for the rest of the year, Bangko Sentral ng Pilipinas Governor Amando Tetangco said this week. He said July 11 that it will record a surplus of $1.1 billion this year, after a deficit of $4.14 billion in the first six months.

Malaysia’s ringgit appreciated 0.3 percent in the last five days to 3.175 per dollar. It has gained for five straight weeks, the longest winning streak since March. Indonesia’s rupiah climbed 0.3 percent to 11,578 and reached a two-month high of 11,483 on July 23 after Joko Widodo was named the nation’s next president following a July 9 vote.

Elsewhere in Asia, Taiwan’s dollar rose 0.1 percent this week to NT$30.035 per dollar, South Korea’s won advanced 0.3 percent to 1,026.15 and Vietnam’s dong retreated 0.1 percent to 21,228.

To contact the reporter on this story: Liau Y-Sing in Kuala Lumpur at yliau@bloomberg.net

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

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