The Malaysian ringgit and the Thai baht logged strong gains among a firmer Asian currency basket on Thursday (July 27), boosted by a weak dollar, after the US Federal Reserve delivered its much-awaited 25 basis point hike, while remaining vague about another possibility of a raise in September. 

The US Federal Reserve has raised rates for the 11th time in the last 12 times that it has met and kept the benchmark overnight interest rate in the 5.25%-5.50% range, and will now continue to assess the possibility of more rate hikes in future.  

"Powell’s comments are on net, less hawkish than what we have heard in June when he threatened back-to-back hikes," analysts from Maybank wrote.

"As such, this could be very well the last rate hike for the cycle unless data suggests a re-acceleration in inflation pressure due to the strength of the economy/consumers." 

The dollar index, which measures the strength of the greenback against six major rivals, dropped almost 0.3% to 100.81 at 0425 GMT. 

A rate peak in the US will lead investors to lean on risk-sensitive, higher-yielding Asian assets, while cementing stances of multiple Asian banks who had opted for a pause.  

Moreover, investors will also look for additional cues on monetary policy from the European Central Bank later in the global day. 

Back in the region, the Malaysian ringgit was the top gainer of the day, strengthening about 0.5% to hit a two-week high to trade near 4.525 against the dollar. This was closely followed by the Thai baht which appreciated about 0.4%. 

Other currencies such as the Singapore dollar, Philippines peso and the Indonesian rupiah all rose in the range of 0.1% and 0.2% 

"The lower-yielding currencies in Asia had suffered at the hands of a hawkish Fed. But this does not necessarily mean they would rebound more now that the Fed is done," Joey Chew, Head of Asia FX Research at HSBC said in a research note.

"As for the higher-yielding currencies in Asia (like IDR), we think these will remain resilient." 

Separately, most Asian equities gained, with shares in Seoul, Singapore, Taiwan and Thailand trading higher between 0.2% and 0.7% 

  - Reuters