Asian currencies inched lower on Tuesday in thin holiday trade as the dollar held near 6-1/2 month highs scaled in the previous session, as concerns about Italian politics and the euro zone dented investor sentiment. Uncertainties regarding the elections in Italy pressured the euro, helping the dollar's gains. An index which measures the dollar against a basket of six rivals was up 0.1 percent to 94.324 by 0449 GMT.
Investors now await the US ADP employment report, first-quarter economic growth numbers and consumer spending numbers later this week. "A slower print on price-related data in particular PCE core and wage growth on Friday, could reinforce the case for the US dollar and Treasury yields to ease, and that may provide a breather for emerging forex," said Christopher Wong, a senior FX strategist with Maybank.
The Chinese yuan weakened up to 0.3 percent to its lowest level since mid-Jan at 6.4177 per dollar. The People's Bank of China lowered its official yuan midpoint to 6.4021 per dollar, its weakest in more than four months, on Tuesday, reflecting strength in the greenback. The South Korean won slipped after four straight sessions of gains, which were driven by Washington's revived diplomatic efforts with North Korea.
South Korean President Moon Jae-in said there could be more impromptu talks and summits with North Korea's Kim Jong Un, as US officials sought to resurrect a scrapped meeting between President Donald Trump and Kim.
The Indian rupee, which had been gaining thanks to declining oil prices, fell the most among regional currencies on Tuesday, down 0.4 percent.
Investors are now awaiting Bank Indonesia's ad-hoc meeting on Wednesday, at which analysts expect the central bank to raise interest rates to support the rupiah, which had hit 2-1/2 year lows earlier this month, and to plug capital outflow.
The rupiah had climbed nearly 1 percent on Monday.
Currency trading in Indonesia, Malaysia and Thailand was closed for local holidays.