Asian currencies gained after European leaders took steps to contain their debt crisis and U.S. consumer confidence topped forecasts, easing concern that global growth is slowing.
The MSCI Asia-Pacific Index of stocks snapped a two-day drop after last week’s European summit resulted in an agreement that tightens budget rules and provides an extra 200 billion euros ($267 billion) of financial aid for euro-area nations. Confidence among U.S. consumers rose to a six-month high of 67.7 in December, an index showed on Dec. 9. The median estimate in a Bloomberg News survey was for a reading of 65.8.
“The market is digesting what happened in Europe,” said Raymond Yeung, an economist at Australia & New Zealand Banking Group Ltd. in Hong Kong. “Developments over the next few days will still be highly vulnerable to external events.”
The Philippine peso advanced 0.2 percent to 43.535 per dollar as of 10:51 a.m. in Manila, according to Tullett Prebon Plc. South Korea’s won strengthened 0.2 percent to 1,145.13, Thailand’s baht rose 0.1 percent to 30.90 and Taiwan’s dollar appreciated 0.1 percent to NT$30.215.
The won snapped a two-day decline as the Kospi share index rose by the most in more than a week. Economic growth will slow to 3.7 percent next year from 3.8 percent this year and 6.2 percent in 2010, the nation’s finance ministry said in an e- mailed statement today.
Yuan Advances
“The won will recover some of the losses it made last Friday when skepticism about the European summit prevailed,” said Nam Kyung Tae, a Seoul-based currency dealer at Industrial Bank of Korea. “Still, the currency may not strengthen further as nothing is actually solved regarding Europe’s crisis and uncertainties in the financial market remain.”
The yuan gained as a report in the Financial News, citing Xuan Changneng, head of the People’s Bank of China’s financial stability bureau, said policy makers will maintain flexibility based on China’s situation while pushing forward with interest- rate and exchange-rate reform. The central bank raised its daily fixing 0.09 percent to 6.3297 per dollar, the strongest level since Nov. 9. Overseas sales rose 13.8 percent in November from a year earlier, the smallest gain since 2009, official data show.
“The PBOC’s comment quelled investors’ depreciation expectations after the weaker export growth,” said Kenix Lai, a Hong Kong-based currency analyst at Bank of East Asia Ltd. “The stronger fixing also shows that China will still allow gains in the currency, even though the pace may slow.”
The yuan strengthened 0.09 percent to 6.3592 per dollar, the biggest advance since Dec. 1, according to the China Foreign Exchange Trade System. The currency is allowed to fluctuate as much as 0.5 percent on either side of the PBOC’s fixing.
Elsewhere, Malaysia’s ringgit and Vietnam’s dong were unchanged at 3.1513 per dollar and 21,006, respectively. Indonesia’s rupiah fell 0.1 percent to 9,085, while Singapore’s dollar gained 0.3 percent to S$1.2946.