Emerging Asian currencies and stocks advanced on Wednesday, with the Indonesian rupiah and Malaysian ringgit rising more than 1% each, after positive economic data from China and a surprisingly soft US inflation print bolstered investor risk appetite.
The Indonesian rupiah rose as much as 1.5% to hit its highest level since Sept 29, while the Malaysian ringgit gained 1.3% to touch a level unseen since Nov 7.
The Taiwan dollar firmed 0.7% to its highest level since Oct 11.
Shares in South Korea led the gains among Asian stock markets with a rise of 2.2%.
Thailand stocks rose as much as 2% to hit their highest level since Nov 8, while Indian shares climbed 1.1% to a level last seen on Oct 19.
Softer-than-expected US inflation data for October has bolstered views that the Federal Reserve has finished raising interest rates, pushing the dollar lower and providing relief to Asian currencies and stocks.
The dollar index, which measures the US currency against a basket of peers, was last trading at 104.190, slightly above a two-month low hit on Tuesday, while Treasuries nosedived overnight after the softer inflation data.
"The sharp pullback in UST yields post-CPI definitely provided Asian FX some room for recovery. In addition, whispers of more support measures for the housing market in China also likely buoyed sentiment in the region," said Fiona Lim, a senior FX strategist at Maybank, Global Markets Singapore.
Asian currencies and stocks also benefited from positive China economic data, with October retail sales and industrial output beating expectations. Meanwhile, China's property sales fell at a faster pace and investment in real estate slumped.
Lim said China data was a mixed bag and the country's recovery is still too fragile to have a lasting boost for Asian currencies and would require evidence of a stabilisation in the property market there at the very least.
Bonds in the region also advanced, with Indonesia's 10-year benchmark bond yields falling 10.9 basis points to 6.837%, while those in India dropped 5.7 basis points to 7.226%.
Market participants are now awaiting the Philippine central bank's monetary policy decision on Thursday.
The Bangko Sentral ng Pilipinas is expected to keep its key interest rate unchanged, according to a Reuters poll of economists.