The Philippine peso strengthened to a 6-1/2 month high on Tuesday, breaking through 54 per dollar as banks sold dollars sent home by expatriate Filipinos when businesses opened after a three-day weekend.
The Singapore dollar and other Asian currencies also gained ground against the dollar following the US currency's overnight drop against the yen and euro after weak US home sales data.
Chinese yuan non-deliverable forward contracts strengthened to price in a sharper appreciation in the coming year after US Treasury Secretary John Snow urged China to make the currency more flexible to avoid the risk of being branded a currency manipulator in the Treasury's next report in April.
The peso climbed as high as 53.91 per dollar, its strongest level since early May. It has gained 4.4 percent this year, making it Asia's best-performing currency against the dollar.
Dealers in Manila said dollar remittances from overseas workers helped offset the impact of weak economic data that showed gross domestic product expanded a smaller-than-expected 0.6 percent in the third quarter from the previous three months.
"Some banks had overbought dollar positions because of remittances during the long weekend," said Rovic de Guzman, head of currency trading at Union Bank of the Philippines in Manila.
He said the currency could rise to 53.85 in the near term although the weak data could reignite concern about the outlook for the economy and fiscal consolidation.
"Interestingly, the GDP data was disappointing. Only last week Fitch issued a warning that the Philippines still has some problems," de Guzman said.
Fitch said on Thursday it was premature to consider an outlook or ratings upgrade as weak revenue collection and political uncertainty continued to dampen economic prospects despite the introduction of a broadened sales tax this year.
The Singapore dollar, Taiwan dollar and South Korean won were lifted after Snow's comments boosted the yuan's spot rate to its highest level since the July 21 revaluation.
The US Treasury did not label China a currency manipulator in a report on Monday on the currency practices of its major trading partners, thanks partly to China's decision to revalue the yuan by 2.1 percent in July, when it also ended the currency's peg to the dollar.
The US Treasury report called on the IMF Managing Director Rodrigo Rato to report to the fund's board and policy-setting committee on "an expedited basis" on ways China and other Asian countries could introduce more currency flexibility and bolster domestic demand.
One-year yuan non-deliverable forward contracts. used by investors to bet on the yuan's future value, strengthened to 7.7675 per dollar on Tuesday from 7.7760 on Monday.
The six-month contracts rose to 7.9120 from 7.9180 while one-month contracts advanced to 8.0550 per dollar from Monday's 8.0590.