Asian currencies strengthened, led by the Philippine peso and Malaysia’s ringgit, as a surprise rebound in U.S. manufacturing improved the export outlook and buoyed demand for emerging-market assets.
The MSCI Asia Pacific Index of stocks snapped a two-day loss after data showed yesterday that the U.S. Institute for Supply Management’s factory index climbed to 51.5 last month from 49.6 in August. That breached the 50 level, signaling expansion, and beat the median estimate of 49.7 in a Bloomberg survey.
“The ISM came out better than expected, so that provided some support for risk sentiment,” said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd. “Investors are diversifying away from the U.S. dollar and European debt.”
The peso climbed 0.4 percent to close at 41.605 per dollar, according to data compiled by Bloomberg. The ringgit gained 0.4 percent to 3.0519 and Thailand’s baht advanced 0.2 percent to 30.73. The Bloomberg-JPMorgan Asia Dollar Index touched 117.37, just shy of yesterday’s 117.40 that was the highest since March 12. The gauge later fell 0.2 percent.
Federal Reserve Chairman Ben S. Bernanke said yesterday he will sustain record stimulus that boosts the supply of dollars. The Fed announced Sept. 13 it would buy $40 billion of mortgage-backed debt a month until the economic recovery is well-established.
The U.S. Labor Department is due to issue jobs data Oct. 5. The unemployment rate may have climbed to 8.2 percent in September, from 8.1 percent a month earlier, according to the median estimate of economists in a Bloomberg News survey. It has been more than 8 percent since January 2009.
The baht touched a two-week high after global funds bought $28 million more equities than they sold yesterday and pumped a net $89 million into sovereign debt, according to data from the stock exchange and Thai Bond Market Association. The U.S. is Thailand’s third-largest export market, taking about 10 percent of shipments in the first seven months of this year.
“Better-than-expected data out of the U.S. improved risk sentiment,” said Hideki Hayashi, a researcher at the Japan Center for Economic Research in Tokyo. “Now investors are waiting for jobs data from the U.S.”
South Korea’s won dropped 0.1 percent to 1,112.68 from Sept. 28 as traders returned from a holiday yesterday, when China reported manufacturing contracted for a second month in September. Korean data issued today showed consumer prices increased 2 percent last month from a year earlier, accelerating from 1.2 percent in August and more than the 1.8 percent forecast by economists. Financial markets will shut again tomorrow for a public holiday.
Elsewhere in Asia, Indonesia’s rupiah rose 0.1 percent to 9,581 per dollar. Taiwan’s dollar advanced 0.1 percent to NT$29.385 and Vietnam’s dong was little changed at 20,885. Chinese markets are closed all week for holidays, while Indian markets are shut today.