Asian currencies strengthened, led by Malaysia's ringgit and the South Korean won, as signs economic growth is gathering pace in the region attracted global investors.

China today reported the biggest increase in exports for three years, fueling speculation the yuan will be allowed to resume appreciation. Stock markets in Taiwan, India and South Korea have each taken in more than $1 billion from abroad since the start of last week, exchange data show.

"Asian currencies are all doing quite well today as stock markets are rising and triggering inflows," said Ho Woei Chen, a regional economist at United Overseas Bank Ltd. in Singapore. "China's February exports have very important implications for the yuan and rest of Asia."

The Malaysian ringgit appreciated 0.6 percent to 3.3220 per dollar as of 4:30 p.m. in Kuala Lumpur, earlier touching an 18- month high of 3.3135. The won climbed 0.3 percent to 1130.93, near its strongest level in seven weeks. The Indonesian rupiah gained 0.3 percent to 9,183.

China's February overseas sales rose 45.7 percent from the same month last year, beating all but two of 28 economist estimates in a Bloomberg survey. The yuan has been kept stable versus the dollar since July 2008 to support exports, drawing criticism from the U.S. and Europe who say an undervalued currency gives Chinese exporters an unfair advantage

Eoin Treacy's view There has been a great deal of talk about the strength of the US Dollar, but this is to take a somewhat myopic view concentrated more on Euro and Pound spot rates rather the wider global market. Asian currencies in particular are showing considerable relative strength when compared to the US Dollar.

The Euro Trade Weighted Index broke the yearlong progression of rising major reaction lows in January and recently found support in the region of 132, from which is continues to unwind the short-term oversold condition. However, it would need to sustain a move above 137 to indicate demand is regaining the upper hand beyond a short-term relief rally.

The Pound Trade Weighted Index rallied from near 70 in January 2009 and has sustained a progression of higher reaction lows since. However, the current pullback is testing that sequence and an upward dynamic is now required to check potential for a further weakness.

The Asian Dollar Index remains in a consistent uptrend and recently found support in the region of the 200-day moving average. It is currently testing the upper side of the six-month range and a downward dynamic would be required to question scope for a successful upward break.

The Australian and Canadian Trade Weighted indices are also breaking upwards to new recovery highs, demonstrating that the major currency theme at present is Euro weakness and comparative strength in Asia and commodity producing countries rather than any particular strength in the US Dollar.