Asian currencies rose against the dollar on Monday as tensions in the Korean Peninsula eased and a pullback in US Treasury yields increased the appeal of risky assets.
The US 10-year Treasury yield, which lifted the dollar over the past two weeks by breaching the psychologically important level of 3 percent, was hovering near a one week low touched on Friday.
"Three percent could be a sticky level for the US 10-year Treasury yield as demand for the higher-yielding 10-year treasuries could continue to cap yield gains, which would in turn cap the dollar as well," said Saktiandi Supaat, head of FX research at Maybank in Singapore, in a report.
Traders said liquidity was low on Monday with Japan, China and India on holiday and much of Asia closed on Tuesday.
The South Korean won rose 1 percent on signs of easing political tensions in the Korean Peninsula, following a historic summit between the leaders of North Korea and South Korea.
The Philippine peso rose on optimism over S&P's upgrading its outlook for Philippine sovereign rating to positive, while the Thai baht also gained over a quarter percent.
The peso was set to post its first monthly gain in four months.
The Malaysian ringgit was marginally down as investors trimmed their positions in local markets on looming election risks.
"While the Barisan Nasional (BN) alliance is expected to maintain its majority in parliament, the results of the state elections are also important because if more states are won by the opposition it would be negative for the ringgit," Bank of Tokyo-Mitsubishi UFJ said in a report.
Events and data scheduled for this week include the U.S Federal Reserve's May 1-2 policy meeting, at which the central bank is widely expected to keep interest rates unchanged, as well as US jobs data due on Friday.
"Any dovish-leaning rhetoric from the Fed or slowdown in pace of core personal consumption expenditure (PCE) and/or wage growth may help slow the pace of UST yield increases and cushion against the dollar strength," said Maybank's Supaat.
A delegation of top US economic and trade advisers is due in China for negotiations. Some analysts are optimistic that the talks would mitigate concerns over a trade war.
"Positive headlines would reduce risks of an outright trade war, in our view, and could raise expectations for yuan appreciation," Nomura said in a report.
Most Asian currencies were set to end the month lower against the dollar thanks to a surge in U.S Treasury yields.
The Japanese yen has fallen 2.6 percent, its biggest drop in 17 months, while the Indian rupee also fell over 2 percent.