Asian currencies had their biggest weekly gain since March after the Philippines won a surprise credit-rating upgrade and Malaysia’s ringgit rallied on the prospect of an interest-rate increase.
The peso jumped by the most in four years today after Standard & Poor’s raised the Philippines debt rating yesterday to BBB, its second-lowest investment grade. Bank Negara Malaysia said its monetary policy may need to be adjusted after it held borrowing costs yesterday. China’s trade surplus widened in April and Taiwan’s exports jumped, reports showed this week.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, climbed 0.3 percent from May 2 to 115.73 as of 5:19 p.m. in Singapore. The peso jumped 1.2 percent today to 43.655 per dollar, taking its gain this week to 2 percent. Malaysia’s ringgit rose 1.2 percent since May 2 to 3.2277 and South Korea’s won advanced 0.6 percent to 1,024.45.
“Investors’ perception on selective Asian economies has improved,” said Frances Cheung, head of Asian rates strategy at Credit Agricole CIB in Hong Kong. “And some central banks are getting increasingly hawkish. We like the peso, the won and Taiwan dollar.”
Bangko Sentral ng Pilipinas raised lenders’ reserve requirement yesterday for a second time this year, to 20 percent from 19 percent, while leaving its benchmark rate unchanged at 3.5 percent. The rate will be increased to 4 percent by the end of the year, according to the median estimate in a Bloomberg survey.
Gains in the won were capped after its advance to the strongest level since 2008 prompted Bank of Korea Director General Ryoo Sang Dai to warn May 7 that authorities are monitoring the situation and would move to stabilize the currency if necessary.
Taiwan’s dollar completed its second weekly gain on speculation export data that beat estimates will lure more inflows. The island’s overseas shipments climbed 6.2 percent in April, compared with a 2 percent increase in March and the median estimate in a Bloomberg survey for a 5.5 percent gain, official data showed May 7. The currency rose 0.1 percent this week to NT$30.175 against its U.S. counterpart, according to prices from Taipei Forex Inc.
China’s yuan had its biggest weekly gain since February 2012 after data released yesterday showed overseas shipments rose 0.9 percent in April from a year earlier. That compared with the 3 percent drop predicted in a Bloomberg survey of analysts and a 6.6 percent decline in March. The trade excess was $18.5 billion in April, from $7.7 billion in March. The yuan rose 0.5 percent this week to 6.2280 per dollar, China Foreign Exchange Trade System prices show.
“The wider trade surplus and recovery in exports are easing depreciation pressure on the yuan,” said Banny Lam, the Hong Kong-based co-head of research at Agricultural Bank of China International Securities Ltd. “China’s economy is expected to grow at a faster pace in the second half of this year on improving external demand.”
Thailand’s baht fell for a third week after Prime Minister Yingluck Shinawatra was forced from office on May 7 following a Constitutional Court ruling that found her guilty of abusing her power. The currency fell 0.6 percent since May 2 to 32.614 per dollar, according to data compiled by Bloomberg.
Elsewhere in Asia, India’s rupee gained 0.3 percent this week to 59.975 per dollar. Indonesia’s rupiah weakened 0.1 percent to 11,530 and Vietnam’s dong fell 0.1 percent to 21,103.