BENGALURU: Most Asian currencies slipped and equities lacked direction on Tuesday, as divisions among US Federal Reserve policymakers weighed on risk sentiment, while South Korean stocks paused their rally on profit-taking.
The MSCI index of global emerging market currencies also traded around three-week lows, as the dollar gauge, which measures the greenback against a basket of major currencies, hovered around three-month highs.
The South Korean won fell 0.7 percent against the US dollar to log its lowest since October 23, while the Indonesian rupiah declined 0.5 percent to hit a more than five-week low.
The Thai baht and the Taiwan dollar both lost 0.2 percent. The Malaysian ringgit shed 0.1 percent while the Philippine peso was largely unchanged.
Elsewhere, the Mexican peso fell 0.4 percent on the day, while the Argentine peso weakened 2.3 percent in the previous session.
Fed officials overnight offered contrasting views on the economy and its risks, even as the absence of official data due to a US government shutdown clouded the outlook. That left the dollar index anchored just below the 100 mark.
The Fed cut rates last week, but Chair Jerome Powell signalled it may be the last reduction this year.
Markets are now pricing in a 65.7 percent chance of a rate cut in December, down from 94 percent a week earlier.
“Broad sentiments across Asian markets could be somewhat bearish as market players reduced their expectations for Fed’s rate cuts on somewhat hawkish comments from Fed officials,” said Poon Panichpibool, a market strategist at Krung Thai Bank.
“Reducing Fed’s rate-cut expectations, which has boosted the US dollar lately, continue to hurt the sentiments across Asian FX.” Divergent views among Fed officials left investors with weak appetite for equities.