Baht leads Asian currencies this week

KUALA LUMPUR — Asian currencies gained this week, led by the baht’s advance to an eight-month high, as improving economic data in the region spurred capital inflows.

Manufacturing in China, the world’s second-biggest economy, expanded in July by the most since January 2013 and Taiwan’s export orders in June had the biggest increase in 17 months, reports indicated this week. Global funds bought $2 billion more of Thailand’s bonds than they sold in the last four days, set for the largest net weekly purchases since September. The nation’s stocks also drew funds, as did equities in India, Indonesia, South Korea and Taiwan, exchange figures show.

“We’re starting to see slightly better data out of Asia,” said Callum Henderson, Singapore-based global head of foreign- exchange research at Standard Chartered Plc. “Expectations for a China macroeconomic stabilisation have increased on the back of second-quarter GDP and flash PMI data.”

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, advanced 0.2% from July 18 as of 5.21pm in Hong Kong. The baht rallied 0.9 percent to 31.853 per dollar, climbing for a fifth week. The Philippine peso rose 0.5% to 43.285 and India’s rupee strengthened 0.3% to 60.1075. China’s yuan advanced 0.3% to 6.1915.

China, Thailand

China’s preliminary purchasing managers’ index from HSBC Holdings Plc and Markit Economics was at 52.0 in July, the highest in 18 months, according to a report on Friday. Gross domestic product grew 7.5% in the April-June period from a year earlier, the statistics bureau said July 16, beating the 7.4% median estimate in a Bloomberg survey.

The baht reached an eight-month high of 31.740 per dollar on July 23 on optimism the military junta, which seized power in a May 22 coup, will revive growth. The National Council for Peace and Order has approved factory licences and investment projects as well as a new fiscal budget which will help “jump-start” the economy, ML Pridiyathorn Devakula, an adviser to the council, said on July 21.

“Large money inflows in the domestic bond market have accelerated the baht’s strengthening,” Kampon Adireksombat, an economist at Tisco Securities Co in Bangkok, said by phone. “Most investors are very optimistic about the Thai economic outlook from the government’s investment policies.”

Philippine surplus

The Philippine peso rose on speculation the nation’s strengthening external finances will spur debt inflows. The country’s balance of payments position will improve for the rest of the year, Bangko Sentral ng Pilipinas governor Amando Tetangco said this week. He said July 11 that it will record a surplus of $1.1 billion this year, after a deficit of $4.14 billion in the first six months.

Malaysia’s ringgit appreciated 0.3% in the past five days to 3.175 per dollar. It has gained for five straight weeks, the longest winning streak since March. Indonesia’s rupiah climbed 0.3% to 11,578 and reached a two-month high of 11,483 on July 23 after Joko Widodo was named the nation’s next president following a July 9 vote.

Elsewhere in Asia, Taiwan’s dollar rose 0.1% this week to T$30.035 per dollar, South Korea’s won advanced 0.3% to 1,026.15 and Vietnam’s dong retreated 0.1% to 21,228.

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