Yuan rises most since end of $ peg

ASIAN CURRENCIES ROUND-UP

The yuan rose the most since China ended its fixed-exchange rate to the dollar in 2005 as the government signaled faster gains to cool economic growth and curb inflation.

The currency climbed as much as 0.43 per cent after the official China Securities Journal cited Ba Shusong, a cabinet researcher, calling for appreciation to curb prices of imported fuel and food. The yuan may gain by a "big margin,'' Yao Jingyuan, chief economist of the National Bureau of Statistics, told a seminar in Beijing in the afternoon.

The yuan gained 0.37 per cent to 7.3175 a dollar as of the 5:30 pm close in Shanghai, according to the China Foreign Exchange Trade System. The average daily fluctuation this week of 0.28 per cent is three times larger than last week's. The currency's 6.7 per cent gain versus the dollar this year is twice as much as last year's 3.3 per cent advance.

The US trade deficit with China is still set to exceed the last year's record of $232.5 billion, prompting lawmakers including Senator Charles Schumer, a New York Democrat, to propose sanctions unless the yuan controls are loosened. US Treasury Secretary Henry Paulson on December 19 called for faster gains, while refraining from accusing China of manipulating its currency to make exports more competitive.

Philippine peso, South Korean won decline
The Philippine peso declined on concern remittances from Filipinos working abroad are slowing as the end of the holiday season approaches.

The peso halted last week's gain and pared its fourth straight monthly advance. The currency has climbed 18 per cent against the dollar this year, the best performance among the currencies of Asia's 17 largest economies, as money sent home from overseas workers reached a record.

The peso fell 0.7 per cent to 41.585 a dollar as of 4:30 pm in Manila, according to Tullett Prebon. Of the 17 Asian currencies, 12 are headed for annual gains versus the dollar this year.

Remittances, which account for about a 10th of the Philippines's $117 billion economy, rose 15.2 per cent in the first 10 months of the year, according to central bank data.

South Korea's won weakened before a report tomorrow that economists say will show industrial output growth slowed in November.

The won is the worst performer of Asia's 10 most-active currencies outside of Japan this month as consumer confidence declined on speculation the US sub-prime losses will slow the local economy.

Rising credit prices and central bank interest-rate increases have hurt households, whose debt topped 600 trillion won ($639 billion) for the first time in September.