The yuan firmed on surprisingly solid Chinese economic growth data on Wednesday, which raised hopes of stabilization in the world's second-largest economy, while Malaysia's ringgit weakened on rising capital outflow worries.
Most Asian currencies had initially firmed over China's better-than-expected first quarter GDP figures, but later retreated. A revival of the Chinese economy is considered beneficial for regional economies and global growth.
China's economy grew at a steady 6.4 percent pace in the first quarter from a year earlier, defying expectations for a further slowdown, as industrial production jumped sharply and consumer demand showed signs of improvement.
The upbeat readings pushed the yuan up 0.2 percent against the dollar. But analysts caution that it may be too early to call it a sustainable turnaround, and further policy support is likely still needed to keep the momentum going.
The ringgit, however, weakened 0.3 percent to 4.143 per dollar, set for a second straight session of decline after global index provider FTSE earlier this week pointed out the potential exclusion of Malaysia from its World Government Bond
Index (WGBI). It was the top loser on the day, standing at its weakest against the U.S. dollar in nearly three months.
Elsewhere, the Singapore dollar largely wavered between positive and negative territory after the city-state's non-oil domestic exports in March saw their biggest decline since October 2016. The weak trade data points to a potential downward revision of Singapore's already disappointing first-quarter economic growth figures.
While financial markets in Indonesia were closed for general elections on Wednesday, one-year non-deliverable forwards showed the rupiah being traded at 14,800 per dollar at 0533 GMT.
That compared with levels of 14,818 the previous day and Tuesday's spot rupiah close of 14,080. Polls close in the early afternoon in Indonesia and official results will be announced in May.
The Philippine peso, which has surged 1.6 percent so far this month against the dollar, weakened on the day with an analyst citing a possible market correction.
Indian markets were also closed for a public holiday.
FTSE MALAYSIA REVIEW IGNITES OUTFLOW FEARS Malaysia, which has been a part of the WGBI since 2004, may see about $8 billion in outflows if the FTSE review decides to downgrade the country, Morgan Stanley estimates.
A Malaysian-based trader who did not wish to be named said FTSE's announcement had resulted in a little uncertainty, causing selling pressure on the ringgit.
Earlier this month, Norway's sovereign wealth fund said it would cut emerging market bonds from its portfolio, including $2 billion worth of Malaysian bonds it holds.
At the end of the fourth quarter, foreigners owned 142.5 billion ringgit ($34.40 billion) worth of Malaysian bonds or 37 percent of the outstanding, according to data from the Malaysian central bank. It excludes their holdings of short term bills, sukuk bonds and private sector debt.
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