A composite index of Asian currencies rose to its highest level in nine years on Tuesday, as the difference in yields on regional government bonds drew away from the US dollar.

In other currency exchange trading, the euro was valued at $1.3319, sterling was worth $1.9762 and the dollar traded at ¥114.61.

The highest performer in the JP Morgan index of ten leading currencies was the South Korean won, which rose 0.3 per cent to 924.30 against the dollar, the highest since 1997.

The won rose for the sixth day ahead of a US report on services and factory orders that may add weight to the Federal Reserve case for lower borrowing costs in early 2007.

Elsewhere in the region the Malaysian ringgit rose 0.8 per cent to 3.5585 against the dollar and the Taiwan dollar rose 0.3 per cent to 1.5392 against the US dollar.   

"The yields are looking more attractive in Asia, so people are buying those currencies," Tetsuo Yishikoshi of Sumitomo Mitsui Banking told the International Herald Tribune.

Overall, the JP Morgan index rose 0.2 per cent to 108.92 over the course of the day.