Asia's currency markets enjoyed another day of stellar gains on Wednesday as the minutes from the last Federal Reserve meeting fuelled talk that the US central bank is almost done with lifting interest rates.
Most regional currencies, in a rally led by the Japanese yen, hit multi-month highs against the dollar.
The South Korean strengthened past the psychologically important 1,000 mark to hit an 8-month high at 997.9 per dollar.
The Singapore dollar hit a 4-1/2 month peak at 1.6461 per dollar, the Indonesian rupiah set its highest level in almost a month at about 9,635 per dollar and the Taiwan dollar rose as much as one percent in local markets to hit a 4-month high of 32.33 per US dollar.
The minutes of the Fed's December 13 meeting, released on Tuesday, showed the central bank's top officials believed the number of additional rate increases would not be large although its future action would depend on economic data.
Asian currencies had already started the new year on a strong footing, helped by a view that the US monetary tightening that bolstered the dollar last year was unlikely to last much longer.
Analysts said the minutes and data on Tuesday showing a drop in the US Institute for Supply Management's factory index gave the rally in Asian currencies fresh momentum.
The sharp rise in regional currencies raised the spectre of central bank intervention.
A dealer in Singapore said the market was wary of intervention to curb the Singapore dollar's sharp gains but had so far seen no signs of such action.
South Korea's central bank was suspected of intervening in the market on Tuesday to cap the won's strength. A central bank official said on Wednesday that the won's latest rise was the result of an excessive reaction to the Fed minutes.
The Philippine peso gained more than half a percent from Tuesday's close in local markets to a fresh 2-1/2 year peak of 52.37 per dollar, while the Thai baht strengthened to 40.50 - its strongest level against the dollar in 7 months.
Dealers said besides a soft tone in the US dollar, investors were also responding to strong local equity markets, brighter economic data and favourable technical patterns.
"There was strong (dollar) support in the 40.70/85 area and this has been broken," said a trader in Bangkok, referring to the baht. "We have also seen heavy offshore selling of dollar/baht this morning."
The Malaysian ringgit rose and the yuan, traded in offshore derivative markets, was pulled higher in line with the regional currency strength.
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