The Taiwan dollar hit a new 4-1/2-year high and rival Asian currencies gained on Monday after strong US jobs data re-ignited concerns that the record US current account deficit may widen and weaken the dollar. The Taiwan dollar, Asia's best performing currency this year, gained as much as half a percent to 30.78 per dollar, its strongest level since June 2000. It closed local trading a quarter of a percent stronger at 30.88.
The South Korean won gained as much as half a percent despite a report that the president had accepted the resignation of Finance Minister Lee Hun-jai. The Singapore dollar rose as much as 0.4 percent, as did the baht.
US data on Friday showed the economy added 262,000 non-farm jobs in February, above forecasts for 220,000.
"It means that the American economy is doing very well and that the US current account deficit won't be any smaller," said Mark Cranfield, head of treasury for Asia at Landesbank Baden-Wuerttemberg in Singapore.
"That reinforces the view that Asian currencies will continue to appreciate."
Asian currencies have been on an upswing over the past three years helped by strengthening economies. The dollar's outlook dimmed further last year as Asian central banks diversified their foreign currency holdings into non-US dollar assets on worries about the ballooning US current account and budget deficits.
The yen, which has under-performed Asian rivals this year, was up as much as 0.9 percent from late Asian trading on Friday at 104.50 per dollar. The yen has weakened 2.3 percent this year.
The Philippine peso rose 0.6 percent after the local stock index hit a 5-1/2-year high. The central bank said the country's foreign exchange reserves rose 4.6 percent in February helped by a $1.5 billion global bond sale.
The baht's gains were supported by data from the state planning agency which said Thailand's economy grew a higher-than-expected 1.8 percent in the October-December quarter and could expand up to 6.5 percent this year despite the damage done to the country's tourism industry from December's tsunami.
Still, the agency said that the country's current account surplus may plunge to $1.9 billion this year, from $7.3 billion in 2004, as high oil prices turn the trade surplus to a deficit.
"We're watchful on two key fronts: first, export growth has been decelerating and given the stepped up spending on infrastructure projects, trade deficits could be the norm," Wong Chee Seng, economist at DBS Bank wrote in a note to clients.