Peso leads currencies' weekly advance

SINGAPORE — 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.

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The peso jumped by the most in four years on Friday 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 on Thursday. 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% from May 2 to 115.73 as of 5.19pm in Singapore. The peso jumped 1.2% on Friday to 43.655 per dollar, taking its gain this week to 2%. Malaysia’s ringgit rose 1.2% since May 2 to 3.2277 and South Korea’s won advanced 0.6% 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 on Thursday for a second time this year, to 20% from 19%, while leaving its benchmark rate unchanged at 3.5%. The rate will be increased to 4% by the end of the year, according to the median estimate in a Bloomberg survey.

Won Warning

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 stabilise 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% in April, compared with a 2% increase in March and the median estimate in a Bloomberg survey for a 5.5% gain, official data showed May 7. The currency rose 0.1% last week to NT$30.175 against its US counterpart, according to prices from Taipei Forex Inc.

China’s yuan had its biggest weekly gain since February 2012 after data released on Thursday showed overseas shipments rose 0.9% in April from a year earlier. That compared with the 3% drop predicted in a Bloomberg survey of analysts and a 6.6% decline in March. The trade excess was $18.5 billion in April, from $7.7 billion in March. The yuan rose 0.5% 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% since May 2 to 32.614 per dollar, according to data compiled by Bloomberg.

Elsewhere in Asia, India’s rupee gained 0.3% this week to 59.975 per dollar. Indonesia’s rupiah weakened 0.1% to 11,530 and Vietnam’s dong fell 0.1% to 21,103.

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