Asian currencies tied down as central banks seek to slow gains

Most Asian currencies were rangebound against a weaker dollar on Monday with several regional central banks taking steps to counter appreciation against the greenback, while stocks climbed on hopes of a vaccine-led economy recovery.

With the dollar languishing near a 2-1/2-year low against a basket of global currencies, both China's yuan and the Indian rupee gained ground in the face of official moves to cap appreciation.

The baht and the won both inched lower, with dealers in Bangkok reporting more intervention by the Bank of Thailand around the 30 per dollar level which exporters say is critical to keep them globally competitive.

Investors poured money into Asian equities last month, helping both stock and currency markets recover further from losses in the first quarter's coronavirus-driven sell-off.

Authorities are worried the flood of money, seeking out higher-yields and economies which may bounce back faster next year, will yield excessive gains in a number of Asia's export-reliant economies.

South Korea's president, Moon Jae-in, on Monday called for steps to help exporters hit by a stronger won, adding that measures to boost exports should be bolstered at a time when domestic demand and consumption are shrinking.

The won dipped 0.14%, and the export-focused KOSPI also fell, as sentiment took a further hit after South Korea ordered schools to close from Tuesday as it battles its worst COVID-19 outbreak.

The Indian rupee traded marginally higher, with traders predicting the Reserve Bank of India would continue to mop up dollar inflows after a brief hiatus last week.

"The RBI has been buying dollars continuously since June as it looks to contain volatility when there is a large capital outflow or inflow," said Anindya Banerjee, vice president at Kotak Securities.

"This contrasting picture when the economy is still in the dumps and the financial markets are doing so well is when there will be an increased RBI presence."

The yuan firmed around 0.1%, even after a decision by the central bank to lower a parameter on cross-border financing, widely seen as an official attempt to slow the pace of the currency rally.

Singapore stocks jumped 1.3%, with market participants looking ahead to Prime Minister Lee Hsien Loong's national address on the COVID-19 situation in the city-state later in the day.

Government officials have previously said further easing of COVID-19 curbs was possible by the end of the year, with only a handful of local cases reported in recent weeks.