BLBG: Asia Currencies Rise, Led by Won, as Recovery Spurs Risk Taking
By Lilian Karunungan and Patricia Lui
Feb. 3 (Bloomberg) -- Asian currencies rose, led by South Korea’s won and the Philippine peso, as gains in U.S. home sales and Brazil’s factory output stoked optimism a global economic recovery will boost appetite for emerging-market assets.
The won climbed for a second day as foreign investors bought more Korean shares than they sold and the MSCI Asia- Pacific Index of regional shares advanced. Sales of previously owned U.S. homes increased 1 percent in December after a drop of 16 percent in November, the National Association of Realtors said yesterday. Brazil’s industrial production jumped a greater- than-expected 18.9 percent in December from a year earlier, government data showed.
“The tone in Asian currencies is a bit more supportive today as the recent macro data flow out of the U.S. has been more positive,” said Prakriti Sofat, a regional economist at Barclays Plc in Singapore. “We are seeing a bit of a breather after the recent sell-off.”
The won strengthened 0.6 percent to 1,153.40 per dollar as of 11:45 a.m. in Seoul, according to data compiled by Bloomberg. It reached 1,174.9 on Feb. 1, the weakest level since Dec. 28. The peso climbed 0.2 percent to 46.318 and the Indonesian rupiah advanced 0.2 percent to 9,340.
The MSCI Asia-Pacific Index of equities rose 0.6 percent after the Standard & Poor’s 500 Index yesterday capped its biggest two-day rally since October. The S&P 500 gained 1.3 percent at the close of trading in New York.
Exporters Selling
South Korea’s benchmark Kospi index of stocks gained 0.7 percent today, paring the year’s loss to 4.5 percent. The nation’s exports increased 47 percent from a year earlier to $31.1 billion in January, the Ministry of Knowledge Economy said on Feb. 1.
“Global stock markets are gaining strength and it’s the same in Korea,” said Ko Yun Jin, a currency dealer at Kookmin Bank in Seoul. “Foreigners are buying stocks. Around the 1,160 level, there were a lot of exporters selling, so it was hard for the Korean won to weaken.”
Malaysia’s ringgit rose for the first time in three days as economic recovery at home and abroad boosted expectations for interest-rate increases. The currency strengthened 0.2 percent to 3.4140 in Kuala Lumpur.
A trade ministry report on Feb. 5 will show Malaysia’s exports rose 11.8 percent in December, marking the biggest gain since September 2008, according to a Bloomberg News survey.
“The latest data are bringing back optimism in the market and are supportive of risk taking,” said Tan Voon Ching, a foreign-exchange trader at OSK Investment Bank Bhd. in Kuala Lumpur. “Recent talk of higher interest rates should also support the ringgit.”
Financial Imbalances
Bank Negara Malaysia on Jan. 26 said borrowing costs cannot remain too low for too long to prevent “financial imbalances.” Five of 12 economists predicted the central bank will raise its overnight rate by at least 25 basis points from a record-low 2 percent in the second quarter, a separate Bloomberg survey shows.
Elsewhere in Asia, the Taiwan dollar advanced 0.1 percent to NT$32.015. The Singapore dollar was little changed at S$1.4105 and the Thai baht rose 0.2 percent to 33.09. China’s yuan was little changed at 6.8269.
To contact the reporters on this story: Lilian Karunungan in Singapore at at lkarunungan@bloomberg.net; Patricia Lui at plui4@bloomberg.net
