The Philippine peso and Thai baht hit their highest levels in two months against the dollar on Tuesday as the US currency fell broadly in anticipation the Federal Reserve will cut rates to near zero to buffer an economy in recession.
The Philippine peso was one of the biggest gainers as it firmed 0.7 percent to hit as high as P47.31 to the US dollar, the strongest level since mid-October, as the country swung to a surplus in its balance of payments in November. It closed at P47.40 Tuesday.
On Tuesday, the central bank said the Philippines posted a balance of payments surplus of $19 million in November, bouncing back from a deficit of $1.195 billion in October.
The Singapore dollar also hit its highest in nearly two months, as investors sold the US dollar on expectations the Federal Reserve will announce it is halving its policy rate to 0.5 percent later in the day.
The Thai baht and the Singapore dollar scaled to a 1-½ month high of 34.77 and 1.469 respectively, while the Taiwan currency was hit a one-month peak of around 33.
"The US dollar is on a downward trend in the region," said a forex dealer in Bangkok. "For the Thai baht, the new prime minister was a supporting factor as that meant that the political issue was resolved for now."
The market expects the Federal Reserve to halve its benchmark federal funds rate to near zero and unveil other measures to try and stave off a recession in the world's largest economy.
In Thailand, the market welcomed the country's new prime minister, with the central bank governor quoted as saying in Hong Kong that his appointment was a step towards establishing political stability.
The South Korean won was up by more than 1.0 percent at 1,348.4 to the US dollar after last month's sharp sell-off, though the market was cautious ahead of more US data releases.
State Street said in a report that the won had room to recover after being undervalued this year.
"Our value metric implies extreme currency undervaluation comparable to the Asian currency crisis, while the outlook on the balance of payments continues to improve," State Street said.