Asian currencies advanced after Federal Reserve Chairman Ben S. Bernanke said policy makers are studying further monetary easing, which previously has increased the flow of funds seeking higher-yielding assets. South Korea’s won rallied the most in two weeks and Malaysia’s ringgit climbed for a fourth day as the dollar slid against a basket of six currencies. Bernanke said possible Fed stimulus measures may include adding to two rounds of asset purchases since the global financial crisis. “There will probably be a third round of quantitative easing which will probably de-base the U.S. dollar and support Asian currencies,� said Chua Hak Bin, a Singapore-based economist at Bank of America Merrill Lynch. The ringgit strengthened 0.3 percent to 3.1575 per dollar as of 10:05 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The won gained 0.2 percent stronger at 1,141.20, the Philippine peso rose 0.2 percent to 41.625 and Taiwan’s dollar was 0.1 percent higher at NT$29.959. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s currencies, rose for a fourth day, its longest winning streak in a month. Its 60-day historical volatility dropped to 3.69 percent from 3.71 percent. The Dollar Index has declined 0.8 percent in four days versus the currencies of its six major trade partners. China Meeting “We haven’t really come to a specific choice at this point, but we are looking for ways to address the weakness in the economy should more action be needed to promote a sustained recovery in the labor market,� Bernanke said in his testimony to Senate Banking Commission in Washington yesterday. China’s yuan was little changed at 6.3728 per dollar in Shanghai. The People’s Bank of China set the currency’s daily reference rate at 6.3140, or 0.04 percent stronger than yesterday. Premier Wen Jiabao said yesterday that China’s labor situation will become more “severe,� underscoring concern that the weakest economic growth since 2009 will lead to more job losses. The government will continue to implement a more “proactive� labor policy, he said. “Wen’s remarks on employment policy triggered expectations of fresh pro-growth measures in China,� Credit Agricole CIB said in a note to clients today. The State Council could meet as early as today that may be followed with policy-easing measures, the China Securities Journal reported on July 16. Elsewhere, Thailand’s baht dropped 0.2 percent to 31.63 per dollar, Indonesia’s rupiah was steady at 9,464 and the Vietnamese dong was little changed at 20,850. To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.

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