The South Korean won and Malaysian ringgit led Asian currencies higher on Monday as investors bid up riskier assets, prompting several central banks in the region to intervene to temper local currency gains. The US dollar hit a three-month low against a basket of currencies, hurt by persistent worries that the US economic recovery is losing steam.
The South Korean won gained 1 percent to a six-week high of 1,171.3 per dollar, but failed to break chart resistance at 1,170 as authorities were spotted intervening to curb won strength. The Malaysian ringgit gained as much as 0.8 percent to 3.1570 per dollar, its highest since May 2008, on broad dollar weakness and as investors bought risky assets after China's official Purchasing Managers' Index for July was not as weak as feared.
The Indonesian rupiah pulled back to 8,952 per dollar from an intraday high of 8,940 after data showed Indonesia's July inflation accelerated to its highest level since April 2009, fuelling market expectations the central bank may raise interest rates later this year.
The Philippine peso gained half a percent to 45.335 per dollar, a six-week high, as Asian currencies rode on sustained positive sentiment for emerging market assets. The Thai baht gained half of a percent to 32.08 per dollar, with some traders detecting sporadic moves by the Bank of Thailand (BOT) to slow baht gains.