SINGAPORE -- (UPDATE) Asian currencies rallied on Wednesday after the US Federal Reserve's aggressive policy easing a day earlier hit the dollar and boosted stocks.

The Philippine peso rose as far as P46.92 per dollar, up 1.0 percent from Tuesday's close and hitting its highest since Oct. 2. It closed P46.90 per dollar on Wednesday.

"I think the market has moved into more risk-taking sentiment, thus we are seeing some peso appreciation," said a Manila-based trader. "And equities rally due to the Fed rate cut."

The volatile South Korean won jumped more than 3.0 percent at one point to 1,304.9 per dollar, its strongest level since early November.

The won has gained 11 percent against the dollar since it hit an 11-year low on Nov. 21, but it remains one of Asia's worst performing currencies with a loss of 29 percent this year.

The rupiah jumped about 2.0 percent to 10,900 per dollar, helped by suspected central bank dollar-selling.

"Investors are selling dollars after the US rate cut," said a trader in Jakarta.

Indonesia's central bank issued rules to curb speculation in the rupiah, banning banks from making loans or overdrafts that could be used for certain derivative transactions.

The dollar dipped towards a 13-year low against the yen and hovered above 2-1/2-month troughs against the euro, a day after the Federal Reserve slashed its federal funds rate target to a range between zero and 0.25 percent.

The Fed also said it would employ all available tools to promote the resumption of growth and preserve price stability.

The MSCI index of Asia-Pacific stocks outside Japan rose 2.1 percent at 0502 GMT, taking its cue from a 4.2 percent rally in the Dow Jones Industrial Average on Tuesday.

The Singapore dollar briefly hit 1.4543 per US dollar -- its highest since early October -- before retreating to 1.4568 after data showed Singapore's non-oil exports (NODX) fell a less-than-expected 2.8 percent in November from October.

"Basically, the general US dollar weakness still prevails, though there is a slight bounce after the NODX," said a Singapore-based trader.

Most Asian currencies were hit by the global market rout earlier this year but some have recovered as foreigners start to buy regional assets. Analysts say, however, the rise may have been exaggerated by thin trading volume as the year-end approaches.

"Position closing towards the year-end is one factor and the more aggressive than expected Fed move is also bolstering Asian currencies outside Japan," said David Mann, currency strategist at Standard Chartered Bank in Hong Kong.

"But we still expect to see some weakness in Asian currencies outside Japan in the first half of 2009," he said.