Asian currencies were subdued on Thursday as the dollar advanced, with investors shifting their attention back towards the US and global monetary policy tightening campaigns as the crisis in the global financial sector eases.

The Thai baht led regional peers lower, down 0.4% after two days of straight gains, following a fifth consecutive 25 basis points (bps) hikes on Wednesday.

The currency is on track for a monthly gain of over 2.5% in March.

“We view lesser pressure for the central bank to intervene further via monetary policy to combat inflation rate.

In addition, the gradual shift in the US Federal Reserve’s funds rate trajectory would reduce external pressure on the Baht as well as Bank Of Thailand monetary path,“ said analysts at MIDF Amanah Investment Bank.

Separately, Thailand’s customs-based exports contracted for a fifth straight month in February, down 4.7% from a year earlier, commerce ministry data showed.

Elsewhere in Asia, the Singapore dollar the Philippine peso, and the South Korean won fell between 0.1% and 0.2%.

Currency markets lacked firm direction this week, partly due to quarter/month-end flows and ahead of US economic data, said analysts at Overseas-Chinese Banking Corporation.

Traders are looking out for the US February personal consumption expenditures (PCE) data, the Fed’s preferred inflation gauge, to further assess the outlook for interest rates and the dollar.

In Asia, Malaysia’s central bank, which left interest rates unchanged at its previous two meetings, on Wednesday flagged prospects for further hikes to its benchmark rate as inflation levels are expected to moderate but remain elevated throughout the year.

The Malaysian ringgit fell 0.1%, but was tracking a 1.4% gain for the month of March.

Asian currencies move in tight ranges, Thai baht slips

“Given that growth is expected to be fairly robust while inflation risks are tilted higher, we expect one more 25 bps hike at the next policy meeting in May,” said analysts at United Overseas Bank.

Also in Indonesia, the nation’s central bank governor Perry Warjiyo said the economy was expected to grow between 5.1% to 5.2% this year, supported by domestic consumption and investment.

The rupiah was steady during the session and is expected to post marginal gains for March.

Equities markets in the region were down modestly with stocks in Singapore, Malaysia, and Thailand fell between 0.2% and 0.4%.

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