Currencies in emerging Asia traded higher for the second straight session against an easing US dollar on Wednesday, while stock markets lacked direction as investors sought more cues on progress in trade deals.
The Malaysian ringgit rose as much as 0.6%, leading the gains among its regional peers.
The Singapore dollar, Thai baht and Philippine peso added between 0.1% and 0.5%.
The dollar inched lower against other major currencies as US President Donald Trump failed to make Republican holdouts back his tax bill.
“This is due to the combination of short-term and long-term headwinds for the greenback,” said Kyle Rodda, senior financial market analyst at Capital.com.
“There is a move (at the margins) to reduce exposure to US assets due to a loss of confidence in US institutions. Dollar is continuing its move lower and I think that has a cyclical and structural basis.”
The ringgit remained about 2.5% below the multi-month highs it reached earlier in May despite advancing in four out of the past six sessions, including today’s gains.
Elsewhere, the Taiwan dollar and South Korean won added 0.1% and 0.7%, respectively.
Asia FX mixed; ringgit extends decline on weak growth outlook
Trump’s “reciprocal tariffs” are set to be reinstated in early July, prompting negotiators worldwide to rush to secure trade agreements with the world’s largest economy.
Recent headlines have done little to lift the mood, with the US Treasury saying it does not anticipate any trade deal announcements during this week’s Group of Seven finance leaders’ meeting in Canada.
Meanwhile, oil prices climbed following a CNN report that said Israel may be preparing for a potential strike on Iranian nuclear facilities, citing new US intelligence.
Southeast Asian countries including Malaysia and Indonesia are net importers of oil, which have been grappling with declining output and rising domestic consumption.
Indonesian assets were steady ahead of an expected rate cut by the domestic central bank.
The rupiah was flat while equities in Jakarta traded 0.6% in the green.
With growth prospects fading, Bank Indonesia is facing mounting pressure to cut interest rates and support domestic demand amid a weakening global economy.
Its regional peers, including central banks in Thailand and the Philippines, already lowered borrowing costs in April.
Stock markets in emerging Asia were mixed with equities in Taipei and South Korea leading gains.
Shares in Seoul rose after battery makers staged a rebound as Trump failed to receive backing for his tax bill, while equities in Thailand and Philippines rose 0.7%.
The Malaysian benchmark index was on track for its fifth-consecutive day of losses, bucking the momentum in its regional peers.
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