Asian currencies gained this week, led by the New Taiwan dollar and the Indonesian rupiah as US Federal Reserve interest-rate cuts revived investor appetite for emerging-market assets.
All 10 of the most-actively traded Asian currencies outside of Japan rose versus the US currency in the week after the Fed lowered its benchmark rate to 3 percent and signaled it's ready to reduce it further to spur US growth. Thailand's baht strengthened beyond 33 to the dollar in onshore trading for the first time since August 1997.
"After the Fed we saw some risk appetite come back," said Patrick Bennett, a currency strategist with Societe Generale in Hong Kong. "Asian currencies at these levels reflect too much confidence, but the won can outperform because its economy is more leveraged to China than others in the region."
The Taiwanese currency traded at NT$32.178 to the US currency, up 0.4 percent from NT$32.3 last week, Taipei Forex Inc figures show.
The rupiah rose 1.3 percent this week to 9,205 per dollar and reached the highest in more than two months.
The won gained 0.3 percent this week to 944.25 per US dollar, Seoul Money Brokerage Services Ltd said.
Indonesia's rupiah advanced for a second week as a report showed inflation accelerated to a 16-month high last month, damping speculation the central bank will cut its 8 percent benchmark rate. South Korea's central bank rate is 5 percent, while Taiwan's is 3.375 percent.
Consumer prices rose 7.4 percent from a year earlier, following a 6.6 percent gain in December, the Central Statistics Bureau said in Jakarta. Economists were expecting the inflation rate to stay little changed.
"Market players are buying the rupiah to target profits from the higher yield," said Masahiro Gao, vice president of the treasury unit at PT Bank Mizuho Indonesia.
Taiwan's dollar rose as exporters converted their overseas earnings to the currency before the Lunar New Year holiday.
Taiwanese banks and government offices will be shut from Wednesday to next Monday for the holiday and companies typically pay employees annual bonuses before the festival.
"Exporters are dumping US dollars, boosting the Taiwan dollar," said Yang Kung-yi (楊恭逸), a currency trader at Shanghai Commercial and Savings Bank in Taipei (上海商銀).
The won snapped two weeks of losses after a report showed South Korea's exports grew at a pace faster than economists expected. Shipments overseas increased 17 percent from a year earlier, the Ministry of Commerce, Industry and Energy said in Gwacheon. That compared with the median forecast for a 15.3 percent gain in a Bloomberg News survey.
Malaysia's ringgit climbed 0.1 percent this week to 3.2355 and the Philippine peso rose 0.7 percent to 40.5. Vietnam's dong advanced 0.1 percent to 15,973.
Singapore's dollar reached the highest since February 1997 on speculation the city-state's central bank is allowing currency gains to curb inflation.
The Singapore dollar advanced for a second week as inflation in December accelerated at the fastest pace since 1982.
The Monetary Authority of Singapore, which expects consumer prices to rise this year at more than double last year's rate, said in October that it would allow "slightly" faster appreciation in the island's dollar.
The currency rose to S$1.4151 from S$1.4227 a week ago, data compiled by Bloomberg show. It earlier strengthened to S$1.4148.
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