Most Asian currencies firmed slightly on Wednesday, recovering from falls in the previous session, but worries over the likely economic impact from the coronavirus outbreak in China lingered.
Nerves in the market were calmed to some extent after the World Health Organisation and Chinese President Xi Jinping expressed confidence in Beijing's ability to contain the spread of the new coronavirus.
The outbreak, which started in the central Chinese city of Wuhan late last year, has killed 132 people and infected nearly 6,000 so far in China.
"Global markets tend to rebound after such outbreaks, provided that the toll exerted on the global economy is not too damaging," Han Tan, market analyst at brokerage FXTM, said in a note.
"A meaningful recovery in the markets, however, could be months away."
Investors now await the outcome of the US Federal Reserve meeting later in the day where the Fed is expected to reiterate its desire to keep rates unchanged at least through this year.
"This status quo fits into the big picture of the Fed playing it cool given that 'insurance cuts' have been front-loaded and the economy is in a 'good place'," Vishnu Varathan of Mizuho Bank said in a note.
The Malaysian ringgit and the Indian rupee gained about 0.2% each.
The South Korean won firmed 0.2% after slipping to its weakest level in three weeks in the previous session.
The won gained despite a Reuters poll showing exports are expected to fall at a faster pace in January, mainly due to fewer working days on account of the Lunar New Year holiday and amid concerns over the economic impact of the coronavirus.
The Singapore dollar, the Philippine peso and the Indonesian rupiah were flat.
In the offshore market, the yuan strengthened 0.14% at 6.9555 per dollar. China's onshore markets are closed for the Lunar New Year holiday and will resume trading on Feb. 3.
Taiwan's financial markets remained closed for holidays.
The Thai baht remained little changed after the finance ministry cut its 2020 economic growth forecast to 2.8% from a 3.3% projection three months ago, mainly due to weaker exports.
The baht, the region's worst performer so far this year, has fallen more than the offshore yuan since Jan. 21, when markets first reacted to the coronavirus outbreak. Thai authorities have forecast an 18% drop in visitor arrivals for China this year due to the virus.
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