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Asian currencies at 15-month high

Asian currencies gained again last week, approaching an 15-month high on optimism that US lawmakers will resolve the nation’s budget deadlock and supported by demand for emerging-market assets.

India’s Rupee had its best week since June after Moody’s Investors Service affirmed its stable rating outlook,

Indonesia’s Rupiah finished a 6 wk slump and China’s Tuan traded at a 19-yr high.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding Japan, advanced for a 6th month running.

The Asian traders believe that the biggest driver is the US fiscal situation, and looking at a 1 month time horizon, that the US lawmakers will come to adeal on the F-Cliff, and that Asian currencies will probably continue to appreciate.

The Rupee rallied 2.3% from a week ago to 54.2650 per USD in Mumbai, according to data.

The Rupiah gained 0.6% to 9,594, and the Ringgit strengthened 0.7% to 3.0380. South Korea’s Won rose 0.3% to 1,082.85.

Global investors added $827-M of new money into emerging-market bond funds in the week through 28 November, according to EPFR Global data.

Foreigners were net buyers of stocks in India, The Philippines, Taiwan and Thailand this month.

Investors bought an extra $167-M of sovereign debt in Indonesia this week, government data showed.

The Asia Dollar Index has climbed 3.7% since May as European leaders pledged to support Greece and amid signs of an economic rebound in China. It touched 118.26 Friday, the highest level since 13 September 2011. The gauge’s 60-day historical volatility fell to 2.18% from 2.21% on 23 November.

Moody’s said on 26 November that its outlook for India’s Baa3 sovereign credit rating remains stable as Asia’s 3rd-largest economy recovers amid strong investment gains. GDP expanded 5.3% in the 3 months through September, official data showed yesterday, matching the median estimate in a survey.

The Yuan gained 0.04% last week to 6.2267 per USD, according to China Foreign Exchange Trade System. It touched a Y 1993 high of 6.2223 on 27 November, and tested the upper limit of its trading band on each of the 5 days. There is pent-up demand for the Yuan, as it is also supported by a trade surplus that has surpassed $180-B this year.

The Philippine Peso appreciated 0.4% from a week ago to 40.895 per USD before a public holiday Friday.

Thailand’s Baht was little changed at 30.69 per USD, as was Vietnam’s Dong at 20,850. Taiwan’s $ rose 0.2% to NT$ 29.116 per USD, its 2nd weekly advance.