Most Asian currencies down

Most Asian currencies fell on Tuesday as a rise in bond yields prompted a slight recovery in the dollar, while market participants awaited clues on US fiscal policy from a two-day Federal Reserve meeting. US Treasury yields surged to more than three-year highs on Monday, bolstering the dollar's yield attraction, which triggered a shift of interest from Asian currencies.
"I think the dollar is higher largely due to surging Treasury yields, which is why Asian currencies are lower against the dollar," said Gao Qi, Asia FX strategist at Scotiabank. Markets are also subdued in anticipation of a two-day Federal Open Market Committee meeting, as well as US President Donald Trump's State of the Union speech, OCBC said in a research note.
In Asia, the South Korean won was the biggest percentage loser among its peers, shedding about 0.7 percent to the dollar. The won, which has gained substantially against the dollar this year, was on track for its third straight session of losses.
South Korea's finance minister said on Monday that the government may delay the implementation of a proposed widening of its capital gains tax base for foreign investors, which was due to take effect from July. Uncertainty over the South Korean government's proposed changes to reduce the foreign ownership threshold will weigh on the won until their resolution, ANZ said in a note.
The Philippine peso was also lower, shedding about 0.4 percent against the dollar. The peso, which ranked among the worst performing Asian currencies in 2017, has shed more than two percent against the dollar in the year so far. The Chinese yuan bucked the trend, rising about 0.2 percent to the dollar. The yuan has been hovering around a more than two-year high, bolstered by a consistently stronger midpoint fixing.
China's central bank set the yuan midpoint lower after seven straight sessions of stronger fixings. "We forecast further CNY appreciation as capital flows have become more balanced and could shift towards a resumption of inflows as foreign demand for onshore China assets increase," ANZ said in a note. The yuan gained about 6.8 percent in 2017.