Asian currencies posted the biggest weekly rally in a month after a rebound in China trade data boosted the outlook for regional exports and growth.
South Korea’s won led the advance, helping spur a 0.4 percent gain in the Bloomberg-JPMorgan Asia Dollar Index. Exports from the world’s second-biggest economy rose 5.1 percent last month, while imports increased 11 percent, with both figures beating forecasts and recovering from a contraction in June. The numbers come amid concerns about a possible end to the US Federal Reserve’s monetary stimulus that has driven demand for emerging-market assets.
“China’s better-than-expected trade data turned sentiment and supported many Asian currencies,” said Jahng Won, a foreign-exchange trader at Shinhan Bank in Seoul. “External factors such as the Fed’s tapering schedule are what investors are more concerned about.”
The won rose 1 percent this week to 1,112.30 per US dollar in Seoul, and reached 1,107.55 on Friday, the highest level since May 14, data compiled by Bloomberg showed.
The New Taiwan dollar advanced 0.6 percent this week to NT$29.955 against the US dollar , from NT$30.129 on Aug. 2.
Foreign institutional selling in the local bourse limited the greenback’s losses, dealers said.
The yuan gained 0.12 percent this week, the best five-day performance in three months, and touched 6.1143, the strongest since the government unified the official and market exchange rates in 1993.
China reported on Friday that consumer prices climbed 2.7 percent last month from a year earlier, less than the median estimate for a 2.8 percent gain in a Bloomberg survey. Data also showed factory production increased 9.7 percent from a year earlier and retail sales advanced 13.2 percent.
It was a shortened week for many Asian currencies due to holidays to mark the end of the Muslim fasting month of Ramadan. Financial markets in Malaysia, India and the Philippines were closed on Friday, while Indonesia remained shut since Aug. 2.
The Thai baht appreciated 0.1 percent to 31.24 per US dollar this week. The Malaysian ringgit last traded at 3.2545 on Wednesday versus 3.2578 on Tuesday. The Philippine peso rose 0.1 percent to 43.585, and the Indian rupee climbed 0.4 percent to 60.86 in the four days markets were open.
Yen, euro gains
The US dollar also fell the most in four weeks amid signs that recoveries from Germany to the UK are strengthening, narrowing the gap between growth in the world’s largest economy and those of other developed countries.
The euro gained 0.5 percent versus the greenback during the week as industrial production in Germany, Europe’s largest economy, rose in June. The British pound rallied against 12 of its 16 most-traded peers as UK exports rose to a record.
The Bloomberg US Dollar Index, which tracks the greenback against 10 major peers, fell 1.2 percent this week in New York to 1,016.93, the biggest drop since the period that ended July 12.
The US dollar depreciated 2.8 percent to ￥96.21, the biggest drop since the week that ended June 14. The US currency rose 0.3 percent to US$1.3342 per euro. The 17-nation shared currency fell 2.3 percent to ￥128.39.
The pound posted its biggest weekly gain versus the US dollar in a month on speculation data showing the UK economy is gathering pace will prevent the Bank of England from keeping interest rates at a record low.
The pound climbed 1.4 percent in the week to US$1.5505 at 4:58pm London time on Friday, its biggest five-day gain since the period ending July 12. It also advanced 0.9 percent to ￡0.8603 per euro, having reached ￡0.8579 on Wednesday, the strongest since July 10.
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