Asian currencies were mostly higher on Monday, boosted by data showing US economic growth slowed in the second quarter of this year and a rally in the Chinese yuan to a post-revaluation high.
Data on Friday showing the US economy grew at a lower-than-expected 2.5-percent annualised rate fanned speculation that a pause in US interest rate rises would come soon.
This pushed the dollar to a 2-1/2-week low at about 114.25 yen and took the yen's gains from late Asian trade on Friday to about one percent. The Chinese yuan hit 7.9650 per dollar, the highest since its revaluation in July 2005, as the central bank stayed out of the market in fresh signs that Beijing might allow its currency to rise faster.
The Indonesian rupiah rose more than 0.5 percent to about 9,045 a dollar and the Philippine peso extended last week's gains to 51.40 per dollar, its highest in almost three months.
The Malaysian ringgit firmed about 0.4 percent to its highest in almost three weeks at 3.6510 per dollar, while the Singapore dollar added about a third of a percent to 1.5770 a US dollar.
"It's a combination of the weak US data and the renminbi gains," said Jimmy Koh, head of economics and Treasury at United Overseas Bank, referring to Asia currency gains.
"It looks like the Fed is going to pause fairly soon, whereas other central banks are still hiking rates. In Asia, central banks could do another 25 basis points over the next couple of months - be it in Malaysia, Thailand or Korea." The South Korean won bucked the regional trend, easing to about 955.30 per dollar, its weakest in more than a week.
The won, which normally moves in step with the yen, also fell against the Japanese currency to 8.3590 won per yen, its weakest in a month. Traders blamed this on the sharp deterioration in Korea's current account balance. Its surplus more than halved in June from May to a seasonally adjusted $422 million, data showed last week, and the central bank said it could worsen in July.
"The current account is probably just an excuse to sell the won," said DBS Bank currency strategist Philip Wee. "There's concern about growth slowdown in Korea and that makes the yen look more attractive," Wee said, referring to the change in the yen-won cross rate.
The Thai baht also underperformed other Asian currencies, undermined by reports of a fresh bird flu outbreak and the prospect of a widening current account deficit, even though data on Monday showed a small surplus in June.
On Friday the Bank of Thailand lowered its growth forecasts for this year and projected the current account would deteriorate to a deficit of $1 billion to $4 billion in 2007 from a range of balanced to a $2 billion deficit in 2006.
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