Economists surveyed by Bloomberg estimated gross domestic product in China, the world's fastest-growing major economy, increased 11.7 percent in the first quarter from a year earlier, compared with growth of 10.7 percent in the prior three months. That would be the fastest pace since the period ended June 2007.

The benchmark Straits Times Index advanced to a 22-month high, up as much as 1.1 percent to 3,004.45. DBS Group Holdings Ltd., Southeast Asia's biggest lender, climbed as much as 4.2 percent. Neptune Orient Lines Ltd., owner of Southeast Asia's largest container line, surged as much as 7.7 percent.

The government revised its inflation target for this year to between 2.5 percent and 3.5 percent, compared with an earlier projection of 2 percent to 3 percent. Consumer prices rose 1 percent in February from a year earlier, the fastest pace since March 2009, official data show.

"Singapore's GDP release represents the start of a series of strong Asian first-quarter numbers which will emphasize that central banks across the region have fallen significantly behind the curve," said Robert Prior-Wandesforde, an economist at HSBC Holdings Plc in Singapore.

Eoin Treacy's view From 2002 to 2008 Singapore followed an overt policy of allowing its currency to strengthen at least in part to combat inflationary pressures and to lend credence to its investment destination credentials, particularly for private banking services. By April 2008, the currency had exceeded its 1995 highs and even during the credit crisis had a comparatively small decline compared to its neighbouring currencies.

The US Dollar peaked against the Singapore Dollar in March 2009 near S$1.55 and remains in a relatively consistent downtrend. It has been ranging around S$1.40 since December but broke downwards once more today. A sustained move back above S$1.41 would now be required to question scope for further Singapore Dollar strength. If happiness in the currency markets is having both the trend and the central bank on your side, then the MAS' move today suggests that the Singapore Dollar has further room to appreciate.

The Asia Dollar Index has retraced the majority of the 2008 decline and broke upwards to new recovery highs two weeks ago. A downward dynamic would be required to check potential for additional short-term upside, while a sustained move below 110 would be required to trigger an MDL stop, break through the rising 200-day moving average and question the consistency of the medium-term uptrend.

There is strong commonality across Asia's currencies with just about all of the more liquid markets appreciating versus the Dollar. In descending order, the currencies which have retraced most of the bear market decline against the Dollar are the Indonesian Rupiah, Australian Dollar, Malaysia Ringgit Thai Baht, Taiwan Dollar, Korean Won, New Zealand Dollar, Indian Rupee and Philippine Peso. Exceptions are relatively small economies such as the Vietnamese Dong, Pakistani Rupee and Sri Lankan Rupee which continue to fall against the US Dollar.

Since Asian and Antipodean economies were less affected by the root causes of the credit crisis, rebounded faster and are among the first where inflationary pressures are evident, it is reasonable to expect that interest rate differentials, against the US Dollar, will continue to expand which makes shorting these currencies an increasingly expensive proposition.