Asian currencies: Taiwan dollar, Malaysian ringgit lead gains

BENGALURU: Most emerging Asian currencies hit multi-month highs on Wednesday, with the Taiwan dollar and Malaysian ringgit leading the pack, as the US dollar slid to a more than three-month low on increasingly dovish commentary from the Federal Reserve, while investors also awaited a Thai central bank decision on rates.

The MSCI International Emerging Market Currency Index rose nearly 0.3%, hovering near a 19-month peak.

Fed governor Christopher Waller, a prominent hawkish voice, said overnight that rate cuts could begin in a matter of months, provided inflation keeps falling, sparking a flurry of exits from the safe-haven US dollar and into riskier assets.

“The rally in EM Asia FX and equities has legs if we do not get any positive surprises in the US data,” Nicholas Chia, macro strategist at Standard Chartered said, referring to the Personal Consumption Expenditure and ISM Manufacturing Index data due later this week.

The Taiwan dollar appreciated the most among emerging Asian currencies, rising as much as 0.7% to hit its highest since late July, while the Malaysian ringgit strengthened 0.6%.

The Singapore dollar also firmed as much as 0.2%, to reach a four-month high, while the Philippines peso reached its strongest since early August, gaining more than 0.2%.

The dollar index, which measures the strength of the US currency against six major rivals, stood at 102.61 as at 0340 GMT.