Most Asian currencies gain on dollar after U.S. tax reform bill delayed

Most Asian currencies on Thursday advanced against the U.S. dollar, which was dented after the unveiling of a key U.S. tax reform bill was delayed for a day.

The U.S. dollar had remained buoyant after the Federal Reserve kept rates unchanged and signalled the likelihood of a third rate hike next month, citing "solid" economic growth.

But the dollar lost its momentum after the tax bill`s introduction was pushed back.

The dollar index, which measures the greenback against a basket of six currencies, was 0.3 percent lower at 0516 GMT.

"The move today seems to be linked to dollar weakness due to the complications relating to the tax reform bill," said Nizam Idris, head of strategy, fixed income and currencies at Macquarie Bank.

He said that President Donald Trump may need to "relent and make some compromise" regarding the phasing in lower corporate tax rates.

Trump plans to nominate current Federal Reserve Governor Jerome Powell, seen as relatively dovish, as the next chair of the U.S. central bank, a source familiar with the matter said on Wednesday. The announcement is expected on Thursday.

The Japanese yen led the gains in the region, up as much as 0.4 percent, setting a trend for the other Asian currencies.

The Philippine peso was 0.3 percent higher after resuming trading, following a two-day domestic holiday. Thursday`s advance reflects "catch up with gains in regional peers," said Gao Qi, Asia FX strategist at Scotiabank.

The Chinese yuan was up 0.05 percent, while the Singapore dollar rose 0.2 percent, hitting its highest in nearly two weeks. The Singapore dollar climb could be attributed to the gains in the euro, given the tight correlation between them, said Gao.SOUTH KOREAN WON

The South Korean won rose as much as 0.24 percent to stay at three-month highs.

Data on Wednesday had showed that October consumer prices fell short of the central bank`s inflation target and muted calls for an interest rate hike in coming months.

But DBS said in a note that "there are growing indications that rate hikes in Korea are not far away," citing gross economic growth returning to the potential level of 3 percent.

Data out last week showed that South Korea`s GDP growth for the year to September accelerated to 3.6 percent from 2.7 percent in the second quarter.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)