Won Leads Weekly Gain in Asian Currencies on Fed Stimulus Bets

Asian currencies advanced, snapping a four-week slump, as U.S. economic data that trailed estimates tempered concern the Federal Reserve will cut asset purchases that have boosted dollar supply.

The Bloomberg-JPMorgan Asia Dollar Index of 10 regional currencies climbed 0.2 percent to 116.99 as of 5:25 p.m. in Hong Kong, the biggest five-day advance since May 3. Manufacturing in the world’s largest economy unexpectedly shrank last month and gains in factory orders missed forecasts, figures released this week show. Non-farm payrolls probably rose 163,000 in May versus 165,000 in April, according to a Bloomberg survey before a Labor Department report today.

“The strong dollar dwindled a bit as investors are waiting for the U.S. jobs data to determine the Fed’s exit strategy,” said Son Eun Jeong, an analyst at Woori Futures Co. in Seoul.

The won strengthened 1.1 percent this week to 1,116.79 per dollar, after losing 2.9 percent in preceding four weeks, according to data compiled by Bloomberg. Taiwan’s dollar jumped 0.6 percent to NT$29.871, the most since the five days ended Sept. 14. The dollar lost 1.6 percent, according to the Bloomberg Correlation-Weighted Index.

Atlanta Fed President Dennis Lockhart said June 3 that U.S. policy makers are committed to record stimulus measures. The Fed is buying $85 billion of Treasury and mortgage bonds each month to keep borrowing costs low and spur the economy. The Fed may reduce its purchase to $65 billion at the October policy meeting, according to a Bloomberg News survey, compared with a reduction to $50 billion forecast in an April survey.

Malaysian Exports

The won advanced as the yen appreciated 4.5 percent against the dollar this week, making Korean goods cheaper versus those of Japanese rivals in global markets. The government today reaffirmed that the Korean economy expanded 1.5 percent last quarter from a year earlier.

Taiwan’s currency gained after exports climbed 0.9 percent in May from a year earlier, beating economists’ estimate for a 0.8 percent decline. Shipments fell 1.9 percent in April.

Malaysia’s ringgit was little changed at 3.0950 per dollar for the week. It dropped 0.4 percent today as the trade ministry said overseas shipments contracted 3.3 percent in April. Economists surveyed by Bloomberg forecast a 0.4 percent gain, after a 2.9 percent decline in March.

Baht, Rupee

Thailand’s baht fell for a seventh week, losing 1 percent to 30.65 per dollar. Foreign investors were net sellers of $568 million of local equities this week through June 6, exchange data show.

India’s rupee was poised for a fifth weekly loss, falling 1 percent to 57.065 per dollar. The currency depreciated beyond 57 for the first time since June 2012 as foreign funds withdrew $2.2 billion from the bond market since May 21, according to data compiled by Bloomberg.

Elsewhere, China’s yuan was little changed this week at 6.1335 per dollar. Indonesia’s rupiah dropped 0.1 percent to 9,805, and the Philippine peso and Vietnam’s dong were steady at 42.26 and 21,016, respectively.

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