Most Asian currencies edge higher

Most Asian currencies edged higher against the dollar on Thursday, with the rupiah leading the gainers in the region and touching a two-week high after Fitch upgraded Indonesia's credit rating. The Indonesian rupiah saw its best session in more than a month after Fitch raised the country's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) to "BBB" from "BBB minus" and said the outlook was stable.
"Asian currencies are trading firmer today, led by the Indonesian rupiah which jumped after a Fitch upgrade and a strong yuan fixing earlier," said Peter Chia, FX strategist at United Overseas Bank (UOB) in Singapore. The dollar index, which measures the greenback against a basket of six major currencies, was nearly flat at 0437 GMT.
"Markets remain sceptical that the passing of the US tax reform will reverse bond inflows which have underpinned Asian FX this year," Chia added. The Philippine peso extended gains for a third straight session as it rose 0.4 percent to its highest in six months.
The South Korean won and the Taiwan dollar gained as much as 0.1 percent and 0.2 percent respectively. The Indian rupee rose slightly while the Thai baht was trading unchanged.
Bucking the trend were the Malaysian ringgit and the Singapore dollar, which slipped 0.1 percent each. The rupiah rose as much as 0.3 percent to its highest level in over two weeks.
Fitch said Indonesia's resilience to external shocks has steadily strengthened in the past few years on the back of macroeconomic policies that have been geared toward maintaining stability. "Fitch's upgrade may now raise expectations of an upgrade by Moody's next year, given that Moody's has already put Indonesia's rating on a positive outlook in early-2017," DBS said in a note on Thursday.
In February, Moody's Investors Service upgraded Indonesia's credit rating outlook to "positive" from "stable". The Chinese yuan rose as much as 0.4 percent to its highest in three months after China's central bank set its official yuan midpoint at the highest level in three months at 6.5795 per dollar on Thursday.
For the year, the yuan has strengthened about 5.6 percent against the dollar, compared with a roughly 6.5 percent decline in 2016, the biggest annual loss since 1994.