SINGAPORE — Asian currencies gained for a third week, led by South Korea’s won, as Chinese manufacturing data eased concern about a slowdown in the region’s largest economy.
The Bloomberg-JPMorgan Asia Dollar Index rose 0.1% from Oct 17 after a preliminary Purchasing Managers’ Index for China rose in October, adding to signs and a resilient labour market and export demand are helping the nation weather a housing downturn. Asian currencies pared gains yesterday as the fewest US jobless claims in 14 years spurred bets the Federal Reserve is on track to raise interest rates next year.
“China’s PMI strengthened, providing a bid tone for Asian currencies in general,” Sook Mei Leong, the Southeast Asia head of global markets research at Bank of Tokyo-Mitsubishi UFJ Ltd in Singapore. “But the dollar seems to be coming back.”
The won climbed 0.8% this week to 1,057.50 per dollar in Seoul, data compiled by Bloomberg show. Indonesia’s rupiah rose 0.4% to 12,066 and India’s rupee advanced 0.3% to 61.2875 through Oct 22 before local markets shut for public holidays.
The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, closed Oct 23 at the highest level since Oct 3 after a report showed US jobless claims over the past month dropped to 281,000, the least since May 2000. The Fed, which indicated in September that it plans to end bond purchases this month, will meet Oct 28-29.
China PMI
The preliminary Purchasing Managers’ Index for Chinese manufacturing compiled by HSBC Holdings Plc and Markit Economics was at 50.4, exceeding the median estimate of 50.2 in a Bloomberg News survey. Numbers above 50 indicate expansion.
Authorities in China are trying to avoid a deeper slowdown after an Oct 21 report showed gross domestic product expanded 7.3% in the third quarter from a year earlier. That compared with the 7.2% median forecast in a Bloomberg survey and the 7.5% expansion of the previous period.
South Korea’s economy, which counts China as its biggest export market, grew 0.9% in the third quarter from the previous three months when it expanded 0.5%, the central bank said yesterday.
Domestic demand led South Korea’s growth in the third quarter, Bank of Korea Director-General Jung Yung Taek said yesterday at a press briefing in Seoul. More time is needed to see the effect of a cut in the benchmark rate, he added. The central bank lowered borrowing costs to 2% on Oct 15, the second reduction this year.
Rupiah gains
The rupiah rose for a second week after the inauguration of President Joko Widodo on Oct 20. Mr Widodo has pledged to cut fuel subsidies and boost economic growth to more than 7%.
“Investor concern has eased after Jokowi was sworn in without trouble,” said Handy Yunianto, head of fixed-income research at PT Mandiri Sekuritas in Jakarta.
Elsewhere in Asia, the Philippine peso appreciated 0.2% this week to 44.810 per dollar. The Chinese yuan rose 0.11% to 6.1172, while Taiwan’s dollar was little changed at NT$30.413. Malaysia’s ringgit weakened 0.1% to 3.2780 and the baht was steady at 32.408.