Asian Currencies Enjoy Weekly Gain

Asian currencies headed for the biggest weekly advance in a month amid signs China will allow the yuan to resume appreciation and on optimism monetary easing in Europe will spur fund flows into higher-yielding assets.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies excluding the yen, rose 0.2 percent in the past five days after the European Central Bank cut its deposit rate last week to minus 0.1 percent. The yuan was set for its best five-day gain since 2011 as the People’s Bank of China boosted its reference rate by 0.19 percent since June 6, the most since December, to 6.1503 per dollar.

“When the ECB started the ball rolling with negative rates, that accentuated the search for carry and that has brought some of the flows into Asia,” said Vishnu Varathan, a senior economist at Mizuho Bank Ltd. in Singapore. “China has started appreciating its currency after a prolonged period where the yuan was depreciating.”

Bloomberg

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