Most Asian currencies up

Most Asian currencies were slightly firmer on Tuesday, and the Philippine peso topped a three-month high, with the dollar largely flat ahead of a possible Senate vote later this week on US tax reform - a key legislative contest for the Trump administration. Uncertainty over prospects of a Senate Republican tax bill has unsettled the dollar recently. President Donald Trump strongly backs the bill, but it faces potential opposition from two Republican lawmakers who could prevent the legislation from reaching the Senate floor.
The dollar index, which measures the greenback against a basket of six major currencies, was flat at 0424 GMT. The index has fallen more than two percent over the past month from a three-month high hit last on October 27. The bill, which favours large tax breaks for businesses, faces opposition from senators such as Bob Corker who wants to add a backstop measure to prevent the tax cuts from widening the deficit.
The Republicans hope to send the legislation to a full Senate vote as early as Thursday. Investors will also be closely watching the testimony from Federal Reserve Chair nominee Jerome Powell. His Senate confirmation hearing later in the day may offer deeper insight into his monetary policy stance.
Powell, in an opening statement released by the Fed on Monday, expressed willingness to move aggressively against an economic downturn and insisted on flexibility and independence from political influence in setting policy. Among Asian currencies, the South Korean won recovered from a 0.2 percent drop early on to trade as much as 0.3 percent higher.
"The move in the USD/KRW is particularly strong as the pair was heavily oversold, so a short rebound can be expected," said Tariq Ali, investment strategist at Standard Chartered Bank. The won is the best performer in the region so far this year, having firmed about 11.2 percent. The Malaysian ringgit weakened slightly, while the baht and Indian rupee were firm at 0.1 percent and 0.2 percent, respectively. The Philippine peso extended its rally into a second day on Tuesday, rising as much as 0.3 percent to its strongest since August 8.
"This year, the peso has lagged the move in Asia ex-Japan currencies, as has the local equity market, but the fundamentals are still attractive, so we are begining to see some interest develop in Philippine assets," said Standard Chartered's Ali. "Recently the capital inflows into the equity market have been strong which confirms this view." China's yuan eased against the US dollar, after a lower setting for the official midpoint and slightly stronger corporate demand for the greenback, which is weakening. The yuan slipped as much as 0.2 percent to a near one-week low on Tuesday, but has strengthened over 5 percent this year.