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Most Asian currencies inched lower on Monday, as upbeat US economic data supported the greenback while soft Asia trade figures knocked regional sentiment at the start of a holiday week.

US data on Friday showed that the world's largest economy had maintained a moderate pace of growth despite the volatility brought about by tensions with China.

The dollar index was at 97.668 by 0539 GMT, flat on the day after rising about 0.3% on Friday.

The Thai baht, which is the best performing currency in the region so far this year, slipped over 0.2% on the day.

Thailand's November exports dropped 7.4%, worse than a 4.5% fall forecast, in a Reuters poll.

The governor of the Bank of Thailand signalled on Monday that there would likely be further monetary policy easing if the economic situation turns out worse than expected.

The baht has shown resilience even as trade tensions bruised financial markets through the year. The strength of the currency has become a cause of concern for policymakers.

"In the case of the THB, it had been seen as a non-China exports hedge, given tighter linkages with Japanese manufacturers relative to other exporters in the region," Vishnu Varathan, senior economist at Mizuho Bank, said in a note last week.

Meanwhile, the South Korean won weakened after data showed that the trade-reliant economy's exports had fallen again in the first 20 days of December. However, hopes that a year-long run of declines may be nearing an end capped the fall.

Exports by Asia's fourth-largest economy during December 1-20 slid 2.0% in value from the same period a year earlier, the smallest decline in a year.

The Singapore dollar also slipped marginally. The city-state's core inflation rate, which is the Monetary Authority of Singapore's preferred price gauge for setting monetary policy, was unchanged in November.

However, a Mizuho Bank note said: "Unless 'tail risks' unleash adverse shocks - likely transmitted via financial markets - the MAS will not resort to more aggressive easing measures."

Copyright Reuters, 2019

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