Most Asian currencies weakened on Thursday, hurt by a stronger US dollar after more central banks adopted dovish policy stances in response to a deteriorating global economic outlook. The dollar index against a basket of six major currencies strengthened 0.1 percent to 96.878, as its peers went on the defensive. The US yield curve remained inverted, a phenomena that has drubbed global markets in recent days. If it persists, the inversion could indicate that a recession is likely in one to two years.
"The dollar has actually held up well, because other central bank have out-doved the Fed," said Khoon Goh, the head of Asia research for ANZ.
The Thai baht weakened 0.2 percent as the country faces political uncertainty after a disputed election on Sunday. Unofficial results are expected on Friday.
Thailand's central bank said on Thursday it has not ruled out a rate hike this year, but added the economy can meet its growth forecast if political turmoil subsides.
In Indonesia, the rupiah was on track for its weakest month since October last year. It was down 0.3 percent on the day.
Referring to Indonesia's trade deficit, ANZ's Goh said "there is a tendency to see more dollar demand to the month-end as corporates start to buy dollars for their import bills."
Elsewhere, Malaysia's ringgit slipped 0.1 percent to 4.075 a dollar after the central bank cut its economic growth forecast for this year, citing slowing global growth and the US-China trade war.
The Philippine peso bucked the overall weak trend, edging higher to 52.7 per dollar.
India's rupee weakened 0.2 percent to 69.013 a dollar. The unit has been supported by foreign inflows into equity and bond markets ahead of a national election starting in April and higher-yielding bonds relative to peers.
The Reserve Bank of India is scheduled to meet next week and is widely expected to cut rates.
"India is a different case where rate cuts tend to benefit the currency unlike other central banks," Goh said, adding a rate cut "should actually provide some support for the rupee because of the FDI inflows into the equity market."
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