Asian currencies traded near a three-week high after China reported record exports for June and South Korea's central bank raised its 2010 economic growth forecast, bolstering demand for regional assets.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region's 10 most-traded currencies excluding the yen, advanced in all but one of the last five weeks as interest-rate increases in India, South Korea, Malaysia and Taiwan helped attract funds from yield-hungry investors. Benchmark rates are near-zero in the U.S. and 1 percent in the euro region, compared with at least 4 percent in India and 2.75 percent in Malaysia.

"Policy makers have been more positive on their economic outlooks in the past weeks," said Brian Jackson, an emerging- markets strategist at Royal Bank of Canada in Hong Kong. "The mood in most Asian currencies should be more positive on this."

India's rupee traded at 46.65 per dollar as of 10:15 a.m. in Mumbai, from 46.67 at the end of last week, according to data compiled by Bloomberg. It earlier touched a one-week high of 46.60. Taiwan's dollar rose 0.3 percent to NT$32.04, after appreciating on all but one of the last six trading days. The Asia Dollar Index was little changed near a three-week high.

Eoin Treacy's view Two pressing concerns of policy makers in Beijing have been the acceleration in property prices and persistently firm inflationary pressures. We are familiar with the raft of measures implemented to dampen speculation in property prices and these are now having a measurable impact with YoY prices falling for the first time since April 2009. Inflation remains higher than desired and the appreciation of the Yuan can be viewed as a policy tool aimed at least in part at mitigating price pressures.

Just as with the last time the Yuan was allowed to appreciate some of the largest beneficiaries remain likely to be China's competitors in the manufacturing sector. Countries such as India, South Korea, Taiwan, Thailand, Philippines, Indonesia and Malaysia are now under less pressure to hold down the value of their currencies against the Yuan. As a result their goods are becoming more competitive with China's on the international market and cheaper on the Chinese domestic market, offering a tailwind for these markets. India, Thailand, Philippines, Indonesia, Malaysia and South Korea are the current upside leaders