VINACHEM

South Korea’s won led a weeklyadvance in Asian currencies as signs of an improvement in theglobal economy brightened the outlook for the region’s exportsand spurred demand for emerging-market assets.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks theregion’s most-active currencies, rose 0.1 percent this week andtouched 117.87 yesterday, the highest level since February. Thewon headed for its best week of the month and the yuan was oncourse for an 11th week of gains, the longest winning streaksince March 2008. India’s rupee fell for a second week as thegovernment reported this year’s fastest inflation.

China’s factory production, retail sales and fixed-assetinvestment accelerated in September, data showed yesterday.Retail sales in the U.S., the world’s biggest economy, increased1.1 percent in September while housing starts climbed 15 percentto a four-year high, reports showed this week. Europ’s leaderscommitted to their goal of creating a euro-area bank supervisorby year-end, according to officials at a European Union summitin Brussels ending today.

“The September data was clearly stronger than expected,”said Nizam Idris, head of Asian fixed income and foreign-exchange at Macquarie Bank Ltd. in Singapore. “The growthmomentum will continue. Still, we are at a very early stage ofthe recovery so it’s too soon to expect” faster gains in Asiancurrencies including the yuan.

The won appreciated 0.5 percent this week to 1,105.36 perdollar as of 11:54 a.m. in Seoul, according to data compiled byBloomberg. The yuan rose 0.24 percent from Oct. 12 and waslittle changed today at 6.2521 after touching a 19-year high of6.2446 yesterday. Taiwan’s dollar climbed 0.3 percent from aweek ago to NT$29.274 and was steady today.

‘Positive Data’

The won weakened 0.1 percent today, snapping a six-dayrally. It touched 1,102.50 on Oct. 17, the strongest level since0ct. 31, 2011. South Korea’s economy probably expanded 1.7percent in the third quarter from a year earlier, the least inthree years, a Bloomberg survey showed before data next week.

“The won was strong this week on positive data from theU.S., but it seems some overseas investors are covering theirshort positions on the dollar,” said Lee Jung Hyun, a Seoul-based currency trader for Industrial Bank of Korea A shortposition is a bet an asset will decline in value.

China Outlook

The yuan has extended its rebound from this year’s low of6.3967 on July 25 to 2.3 percent after data pointed to animprovement in the world’s second-largest economy. Factoryoutput grew 9.2 percent from a year ago, compared with an 8.9percent gain in August that was the smallest in three years,official figures showed yesterday. Retail sales advanced 14.2percent, the most since March, while fixed-asset investmentclimbed 21 percent in the first three quarters.

“We believe China's economy has bottomed out in August orSeptember,” said Tommy Ong, a Hong Kong-based senior vice-president of treasury and markets at DBS Bank (Hong Kong) Ltd.“Improvement in global liquidity and calls for moreappreciation from the U.S. presidential campaign trail are alsosupporting the yuan.”

The rupee lost 1.1 percent from Oct. 12 to close at 53.415per dollar yesterday amid concern faster inflation will erodereturns from local assets. India’s benchmark price index jumped7.81 percent last month from a year earlier, the most sinceDecember, according to figures released Oct. 15.

Elsewhere, the Malaysian ringgit declined 0.4 percent to3.0508, paring a weekly gain to 0.2 percent. Indonesia’s rupiahtraded at 9,591, little changed from 9,588 yesterday and lastweek, prices from local banks compiled by Bloomberg show. Thecurrency reached 9,657 on Oct. 11, the weakest level sinceOctober 2009.

The Philippines peso fell 0.2 percent to 41.415 today,reducing this week’s appreciation to less than 0.1 percent.Vietnam’s dong traded at 20,850, compared with 20,845 yesterdayand 20,855 at the end of last week.