Nov. 9 (Bloomberg) -- Asian currencies rose, led by Malaysia’s ringgit and the Philippine peso, on speculation low U.S. interest rates and a pledge by the Group of 20 to keep stimulus measures will draw investors to higher-yielding assets.

The International Monetary Fund signaled over the weekend that borrowing costs in the U.S., which stand at zero to 0.25 percent, are being used to fund so-called “carry trades.” South Korea’s won and Indonesia’s rupiah reached the highest levels in at least two weeks after the U.S. on Nov. 6 reported it highest jobless rate since 1983, deterring the Federal Reserve from tightening monetary policy.

“With the high unemployment rate in the U.S., expectations of any Fed hike are being pushed back, which is helping risk appetite and equities,” said Gerrard Katz, head of currency trading at Standard Chartered Plc in Hong Kong. “There’s a huge amount of liquidity in the market that needs to be invested.”

The ringgit rose 0.7 percent to 3.3815 per dollar as of 4:42 p.m. in Kuala Lumpur, the biggest gain in a month, according to data compiled by Bloomberg. The won appreciated 0.6 percent to 1,160.80 and the peso advanced 0.6 percent to 46.90. The rupiah climbed 0.4 percent to 9,425 and India’s rupee added 0.7 percent to 46.5125, both the strongest levels since Oct. 26.

The U.S. currency is still “on the strong side” in real effective terms, even as it moves “closer to medium-term equilibrium,” according to a report from the IMF on Nov. 7. The G-20 nations didn’t comment on the dollar’s slump after a meeting in Scotland, where they agreed that stimulus policies will remain until a recovery is assured.

Carry Trades

The dollar has dropped against all but one of its 16 major counterparts in the past six months as investors increased carry trades, where they borrow in countries with low interest rates to invest in higher-yielding assets.

Analysts predict that borrowing costs in Malaysia and Indonesia, currently 2 percent and 6.5 percent, will rise in the second quarter of next year, according to surveys conducted by Bloomberg News. Rates in Korea and the Philippines may increase in the first three months of 2010.

“Any tightening in policy will have to come from currency gains if stimulus measures are maintained,” said Suresh Kumar Ramanathan, a foreign-exchange strategist at CIMB Investment Bank Bhd. in Kuala Lumpur. “This works in favor of Asia versus the dollar.”

The dollar fell to $1.4967 per euro in London from $1.4847 in New York on Nov. 6 and reached $1.4982, its weakest level since Oct. 26. The greenback climbed to 90.14 yen versus 89.88 at the end of last week.

Asian Equities

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies excluding the yen, was headed for its highest close in three weeks. The MSCI Asia-Pacific Index of local equities climbed for a second day.

In South Korea, overseas investors have bought $21.3 billion more of the nation’s shares than they sold so far this year, driving an 8.4 percent gain in the currency. Funds have put almost $11 billion into Taiwan shares.

Taiwan’s dollar gained 0.4 percent to close at a two-week high of NT$32.365 in Taipei. A government report issued after local markets shut showed exports fell 4.7 percent in October from a year earlier, the smallest drop since September 2008. Economists surveyed by Bloomberg had expected a 7.2 percent decline, following a 12.7 percent tumble in September.

Elsewhere, the Thai baht advanced 0.2 percent to 33.32, the highest level since Oct. 14, and Singapore’s dollar rose 0.4 percent to S$1.3868. China’s yuan was little changed at 6.8267.

To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net.

Last Updated: November 9, 2009 03:45 EST