Most emerging Asian currencies rose on Thursday as minutes of the Federal Reserve's latest meeting indicated caution among policymakers over US interest rate hikes. The Malaysian ringgit jumped more than 1 percent to hover near an eight-month high as oil prices rallied. China's yuan rose after the central bank set a stronger daily guidance rate and traders suspected intervention to hold down volatility.
The baht gained as traders cut holdings in the dollar, which broadly slid on Wednesday, when Thai financial markets were closed for a holiday. Minutes from the Fed's March 15-16 meeting suggested that the US central bank appears unlikely to raise interest rates before June due to widespread concern about policymakers' limited ability to counter the impact of a global economic slowdown.
The Fed's next policy meeting is April 26-27. Asian currencies should strengthen "especially prior to the April Fed meeting," said Qi Gao, an emerging Asian currency strategist for Scotiabank in Hong Kong. "We could have two weeks of risk appetite." Gao also said China's macro data "could show signs of a stabilising economy, which may bolster risk-taking sentiment." China will release a series of economic data for March in the coming week. A Reuters poll showed that China's exports likely returned to growth for the first time in nine months in March while the pace of bank lending may have picked up. The ringgit advanced as much as 1.3 percent to 3.8700 per dollar, close to an eight-month peak of 3.8600 hit on Monday. The currency pared some of its gains as its non-deliverable forwards turned weaker.