Weaker US Dollar Lifts Asian Currencies to Fresh Highs

Asian currencies have hit fresh highs as the US dollar stays soft, lifting MSCI's emerging-market currency gauge to a record. The catalyst for this move is a weaker greenback, which has been driven by softer US economic readings. This has led investors to trim expectations for another Federal Reserve rate hike soon, putting pressure off emerging-market currencies.

The result can be seen in Taiwan, where the Taiwan dollar climbed 0.7% to its strongest level in more than six weeks. HSBC said it could keep recovering as dividend-related money leaving the country fades.

Risk appetite followed in stocks, with MSCI's emerging Asia equity index rising 0.7%. Thailand also saw a boost, with the SET index jumping over 1% after stronger-than-expected second-quarter growth and an upward revision to full-year forecasts.