Asian currencies were higher on Thursday as the dollar took a knock after Federal Reserve Chair Janet Yellen signalled further rate increases in the United States will be gradual at best.
The dollar index, which measures the U.S. currency against six major rivals, was down 0.2 percent to 95.609 at 0506 GMT.
Yellen said on Wednesday the U.S. economy is healthy enough for the Fed to raise rates, though low inflation and a low neutral rate may leave the central bank with diminished leeway.
"Some may argue that her remarks overnight were dovish, but we argue that they are rather balanced to some extent," said Christopher Wong, senior FX strategist for Maybank.
The Philippine peso gained 0.2 percent, recovering a little from fresh eleven year lows it had hit this week, partly due to a widening goods trade deficit.
The Taiwan dollar rose as much as 0.6 percent, posting its biggest intraday percentage gain in three months, while the Indonesian rupiah tacked on 0.3 percent, its biggest intraday percentage gain since April 25.
The Indian rupee was up 0.2 percent, it highest in more than three weeks on rising expectations of an interest rate increase.
Inflation data out on Wednesday showing benign price pressures left the door open for a 25-basis-point cut by the Reserve Bank of India.
The next focus for markets will be Yellen's testimony to the Senate Banking Panel and U.S. inflation data on Friday.
CHINESE YUAN
The Chinese yuan rose 0.2 percent, reflecting a broadly weaker dollar and a higher mid-point set by the People's Bank of China.
There was muted reaction to solid Chinese trade numbers released earlier in the day, although the data reinforced a growing view that the world's second-biggest economy is holding its own even though the outlook has dimmed somewhat on the back of Beijing's crackdown on debt risks.
SOUTH KOREAN WON
The won gained the most in the region, up 0.8 percent, its highest in more than two weeks.
South Korea's central bank held its policy rate at a record-low 1.25 percent for a 13th straight month on Thursday, a widely expected decision as policy makers seek to boost subdued private consumption and keep any thoughts of tightening off the table for now.
Stephen Innes, senior trader from Oanda sees this as good sign as "it will keep the equity markets in a pretty good mood. A rate hike could have tampered equity markets as much of the inflow in South
Korea has been predicated on the back of low equity valuations."
The benchmark South Korea stock index was up 1.2 percent.
