SINGAPORE: Asian currencies advanced, led by Malaysia’s ringgit and South Korea’s won, after the U.S. added more jobs than forecast in July, easing concern that growth in the world’s biggest economy is slowing.
The Bloomberg-JPMorgan Asia Dollar Index touched a one-week high after employment in the U.S. increased 163,000, exceeding the median estimate for a 100,000 gain in a Bloomberg survey, a government report showed Aug. 3. The People’s Bank of China said on its website yesterday it will increase the intensity of policy fine-tuning and continue exchange-rate reforms.
“The currency market is getting more comfortable with the economic outlook,” said Andy Ji, a Singapore-based strategist at Commonwealth Bank of Australia. “It’s a glass half-full, but markets are looking at the positives.”
The ringgit appreciated 0.7 percent to 3.1061 per dollar as of 4:55 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. The won strengthened 0.5 percent to 1,129.23, Thailand’s baht gained 0.2 percent to 31.50, and Taiwan’s dollar rose 0.1 percent to NT$29.96.
The Asia Dollar Index, which tracks the region’s 10 most- active currencies excluding the yen, reached 115.58, the highest level since July 31.
The ringgit rose to an 11-week high after European Central Bank President Mario Draghi said Aug. 2 the monetary authority may wade forcefully into bond markets in tandem with Europe’s rescue fund to tackle the region’s debt crisis. Malaysia’s benchmark stock index advanced for a fourth day.
Malaysian Exports
“The market had a positive second thought about Draghi’s statement,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. in Singapore. “The non-farm payrolls were better than expected.”
The ringgit touched 3.1010, the highest level since May 16, before government data that may show overseas shipments slowed in June. The report due Aug. 8 will show exports gained 3.2 percent from a year earlier, compared with a 6.7 percent increase the previous month, according to the median estimate in a Bloomberg News survey.
The won climbed the most in almost a week as the Kospi index rallied 2 percent, its first advance in four days. Eight out of 13 economists surveyed by Bloomberg predict the Bank of Korea won’t cut its benchmark interest rate for a second month at a policy meeting this week, while the rest forecast a reduction of 25 basis points.
“The better-than-expected showing of U.S. jobs data, a key for consumption, is lifting investors’ sentiment,” Im Jeong Jae, a Seoul-based fund manager at Shinhan BNP Paribas Asset Management Co., which oversees about $28 billion, said by phone today. “Emerging-market assets, which have relatively underperformed because they’re perceived as riskier, are rebounding nicely.”
Policy Fine-Tuning
China’s yuan was little changed even after the central bank fixed the reference rate at a stronger level, ending two days of weakness, and said it plans to allow the currency to trade more freely.
The People’s Bank of China’s statement over the weekend saying that it would intensify policy fine-tuning “will sustain hopes for more monetary easing in China - a positive for sentiment,” Dariusz Kowalczyk, a Hong Kong-based strategist at Credit Agricole CIB, said in an e-mail. The yuan traded at 6.3742 per dollar, compared with 6.3727 late last week. The currency touched 6.3572 on July 31, the strongest level since July 5.
Elsewhere, the Philippine peso closed at 41.840 per dollar from 41.855, while Indonesia’s rupiah was steady at 9,465. India’s rupee gained 0.3 percent to 55.5675 and the Vietnamese dong was little changed at 20,855. (Bloomberg/msw)
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