Malaysia, S Korea currencies lead as Asia dodges emerging markets slump

The faltering emerging-market currency rally is stronger than ever in Asia.

Of the nine developing-nation exchange-rates to strengthen last month, six were from Asia, with Malaysia's ringgit and South Korea's won leading the gains.

A Bloomberg index of the 20 most-traded emerging-market currencies posted its first back-to-back monthly drop since January as geopolitical strife and the withdrawal of extraordinary monetary stimulus in the US makes investors choosier about where they put their cash.

Asian countries are being favoured because of their generally superior trade balances, particularly now that China's economy is showing signs of stabilising. South Korean and Indian bond markets attracted a combined US$5 billion last month from international investors, while Turkey and South Africa saw outflows of US$2 billion, data shows.

"Asia stands out as an alternative safe haven, far away from geopolitical stress in Ukraine, Gaza and Iraq," said Anders Faergemann, a senior money manager in London at PineBridge Investments. "The region is also benefiting from the apparent stabilisation of China's economic growth."