(Bloomberg) -- Asian currencies continued to gain on predictions that the Federal Reserve will cut interest rates even as the US economy stays out of recession.
Indonesia’s rupiah advanced by as much as 1% against the dollar, its best single-day gain since December, to 15,675 as most Asian currencies rose against the greenback. US stocks rose Tuesday on optimism that rate cuts might occur even without a recession, fueling risk-on sentiment that spread into Asia’s Wednesday market action.
Bloomberg’s Asia Dollar Index has gained more than 1% so far this month, putting it on track for the biggest advance since November. The Malaysian ringgit and the rupiah have outperformed the most.
Asian currencies have been resilient amid a recovery in risk assets and improved sentiment from US Treasury yields, said Wee Khoon Chong, a senior strategist at BNY in Singapore.
But with technical indicators suggesting the rally is stretched, “we would probably need a sustained equities rally to support current Asia FX strength,” he said.
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