Asian currencies gain on US data

Singapore Asian currencies advanced after reports showed US home sales and durable-goods orders topped economists' estimates and on speculation China will take steps to spur its economy. Taiwan's dollar was headed for the biggest gain since April as the MSCI Asia-Pacific Index of regional shares rose for a second day. Thailand's baht were steady before European Union leaders start a two-day meeting in Brussels to tackle the region's debt crisis. Banks including Citigroup Inc, Nomura Holdings Inc and ING Groep NV are predicting the People's Bank of China will cut banks' reserve requirements again this year. "With the good data out of the US and gains in stocks, risk sentiment is quite stable now," said Kozo Hasegawa, a Bangkok-based trader at Sumitomo Mitsui Banking Corp. "The currencies are likely to be quite range-bound before the results of the European summit come out." Taiwan's dollar strengthened 0.2 per cent to NT$29.905 versus the US currency as of 10:51 am local time, according to Taipei Forex Inc. The Philippine peso added 0.2 per cent to 42.2965 and South Korea's won climbed 0.1 per cent to 1,154.75. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region's 10 most active currencies excluding the yen, was steady and its 60-day historical volatility was little changed at 2.93 per cent. The gauge has dropped 2.2 per cent this quarter amid concern Europe's crisis will sap demand for Asian exports and as China's economy grew at the slowest pace in almost three years. US Data Pending home resales in the US climbed 5.9 per cent after a 5.5 per cent decline in April, the National Association of Realtors reported yesterday. Economists surveyed by Bloomberg forecast a 1.5 per cent gain. Orders for durable goods rose 1.1 per cent in May, the Commerce Department said, compared with the median forecast for a 0.5 per cent increase. The won gained as the Kospi Index of stocks rose for the first time in six days. An official report showed the country's current-account surplus widened in May to a six-month high of $3.6 billion. "The current-account data confirms the positive outlook on the won," said Jeon Seung Ji, a Seoul-based currency analyst at Samsung Futures Inc. China's yuan fell for the first time in four days as the central bank lowered the currency's reference rate before the European summit. The People's Bank of China set its daily fixing 0.03 per cent weaker at 6.3190 per dollar. Asia's largest economy expanded 8.1 per cent in the first three months of the year, the least since the second quarter of 2009. "Investors aren't optimistic that European leaders will come up with any remedies," said Daniel Chan, executive vice- president at Glory Sky Global Markets Ltd in Hong Kong. "China won't let the yuan strengthen as it wants to support exports given how bad the external environment is." Elsewhere, Indonesia's rupiah dropped 0.4 per cent to 9,486 per dollar and the Vietnamese dong was steady at 20,890. Malaysia's ringgit fell 0.1 per cent to 3.1928, while the baht traded at 31.87.