VINACHEM

Asian currencies headed for a fourthweekly gain, led by South Korea’s won, after a slew of datasuggested the worst may be over for the global economy.

Chinese manufacturing expanded for the first time in threemonths as output and new orders climbed, a report showedyesterday. Taiwan released figures this week that showed itseconomy returned to growth in the third quarter, while U.S.factory production increased at a faster pace than forecast inOctober and consumer confidence reached a four-year high.

“There’s optimism about the global economic recovery andthat improves risk sentiment,” said Hideki Hayashi, aresearcher at the Japan Center for Economic Research in Tokyo.“That is encouraging fund inflows into Asia and supporting theregion’s stocks and currencies.”

The won strengthened 0.6 percent this week to 1,090.85 perdollar as of 12:15 p.m. in Seoul, according to data compiled byBloomberg. Taiwan’s dollar appreciated 0.3 percent to NT$29.226,Malaysia’s ringgit gained 0.2 percent to 3.0507 and China’s yuanrose 0.1 percent to 6.2426.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks theregion’s 10 most-traded currencies excluding the yen, reached117.98 on Oct. 31, the highest level since Feb. 29, 2012. TheMSCI Asia Pacific Index of shares rose 0.9 percent this week.

Emerging-market bond funds had net inflows of $1.1 billionin the week through Oct. 31, the eight week in a row thatinflows have exceeded $1 billion, Morgan Stanley said in areport, citing data from EPFR Global.

‘Positive Bias’

China’s Purchasing Managers’ Index climbed to 50.2 inOctober from 49.8 in September. Fifty is the dividing linebetween expansion and contraction. Gross domestic product inTaiwan grew 1.02 percent from a year earlier, after a 0.18percent decline in the previous quarter.

“Asian currencies have been trading with a positivebias,” said Jonathan Cavenagh, a strategist at Westpac BankingCorp. in Singapore. “The evidence this week suggests that wehave advanced further along from a trough point in terms of datamomentum.”

The won headed for its fourth weekly gain after reportsthis week showed South Korean exports unexpectedly rose lastmonth and the nation’s current-account surplus approached arecord high in September. Overseas funds bought $158 millionmore South Korean equities than they sold this week throughyesterday, exchange data show.

“Positive trade and current-account surplus figuressuggested the supply of dollars is abundant, and exportersconverting overseas earnings also supported the won,” said HongSeok Chan, a Seoul-based currency analyst at Daeshin EconomyResearch Institute. “There is speculation that monetaryauthorities are trying to prevent the won from strengtheningbeyond the 1,090 per dollar level.”

Yuan Guided Down

The yuan fell today as the central bank lowered the reference rate for a second day to a level that meant thecurrency had to decline to stay within the trading band.

The People’s Bank of China set the fixing 0.04 percentweaker at 6.3045 per dollar today, 1.02 percent belowyesterday’s closing level for the currency. The yuan is allowedto trade as much as 1 percent either side of the reference rate.One-month forwards traded at the biggest discount to the spotrate in four years as analysts expect the currency will reversea three-month appreciation after next week’s U.S. elections.

“The fixing gives a signal that the PBOC desires a stableyuan at around the 6.3 level as the export outlook remainsuncertain,” said Daniel Chan, executive vice president at GlorySky Global Markets Ltd. in Hong Kong. “Fund flows shouldsupport the yuan but the fixing is curbing further gains.”

Elsewhere, the Philippine peso strengthened 0.1 percentduring the week to 41.175 per dollar as of yesterday. Financialmarkets in the country are shut today. Thailand’s baht rose 0.1percent to 30.73, Indonesia’s rupiah lost 0.1 percent to 9,618and India’s rupee weakened 0.2 percent to 53.6650. Vietnam’sdong was little changed at 20,845.