Thai stocks rose and the baht gained on Monday ahead of the Bank of Thailand's policy decision later this week, as the Southeast Asian nation struggles to recover from the collapse of its vital tourism sector.
The Thai baht gained up to 0.7%, and was at its strongest in two weeks.
A Reuters poll expects Thailand's central bank to hold interest rates at a record low of 0.50% until at least 2023 to support the flailing economy. Its next policy meeting is on Wednesday.
"Bank of Thailand will probably have sufficient policy flexibility for a prolonged hold," Mizuho Bank analysts said in a note.
"Concerns of a weak THB will, however, be the bitter trade-off," they added.
The baht is the region's worst performing currency in 2021, having weakened over 9% against the dollar.
Most other currencies in the region were little changed, as the dollar firmed ahead of Wednesday's US inflation data which is expected to test the Federal Reserve's stance on patient rate hikes.
Bucking the trend, the Indonesian rupiah strengthened as much as 0.5% and was set for its best day in nearly four weeks, gaining ground after it slumped in the last session due to disappointing economic growth figures.
Among equity markets, the Philippines led gains with a 1% jump. The benchmark extended gains for a fifth session and hit its highest in 10 months.
Mizuho analysts say the Philippines' third-quarter GDP data due on Tuesday will stress the need for policy accommodation to be extended, while Malaysia's GDP, due on Friday, is set to show a return to contraction amid coronavirus-induced restrictions.
"Silver lining of higher oil (although constrained by production) aiding the recovery are not immune to China risks," they added, referring to Malaysia's economy.
The Philippines' agricultural output, which usually accounts for less than 10% of overall output, contracted at an annual pace of 2.6% in July-September, reflecting production declines in crops, livestock and fisheries sectors.
Other regional stock markets cheered a robust employment report from the United States and the congressional passage of a long-delayed $1 trillion infrastructure bill.
South Korean stocks were the outlier, shedding more than 1% and extending losses for a fourth day.
Highlights:
**Indonesia 10-year government bond yields are down around 2 bps to 6.180%
**Financials and consumer stocks drive gains in the Philippines