MOST Asian currencies recovered marginally on Tuesday, with the South Korean won and Singapore dollar leading gains, as the U.S. dollar pared some of its overnight gains.
The Malaysian ringgit declined sharply as political uncertainty dampened sentiment.
The U.S. dollar, which rallied in the previous session on mounting worries over China's COVID situation, moved broadly lower ahead of a COVID-19 press briefing in China later in the day that is spurring hopes of a potential easing in the country's strict pandemic restrictions.
In Asia, the South Korean won recouped losses of the previous day to be 1% higher at 0403 GMT, with the Singapore dollar and Thailand's baht adding 0.4% each.
Thailand is awaiting an update on its policy meeting due on Wednesday, when the central bank is expected to raise interest rates by a modest quarter-point for a third straight time, a Reuters poll of economists found.
The Malaysian ringgit, which returned to trading after an extended weekend, weakened 0.6%, snapping a three-day winning streak, while the country's stocks gave up 0.6% as investors watched political developments.
Since mid-last week, when Malaysia got a new leader, the ringgit has appreciated 1.5%, but it is down more than 7% so far this year.
Across the region, stock indexes trading mixed. Shares in Singapore, South Korea and Thailand advanced between 0.3% and 1.0%.
But in Indonesia, Malaysia and Philippines shares lost between 0.1% and 1%.
Markets globally are pricing in comments from the Fed officials who flagged a need for continued policy tightening to gain control of inflation, with no clarity on how far the central bank will need to boost short-term borrowing costs.
"The Fed speakers are very clear that in the next FOMC meeting in December, we will see a deceleration in the pace of rate hikes to 50 basis points," said Alvin Tan, head of FX strategy at RBC Capital Markets.
He added that markets were anticipating slight cuts in interest rates in the second half of 2023.
This week, investors will keep a close watch on three U.S. statistics releases: November consumer confidence data, due later on Tuesday; the second estimate for third-quarter gross domestic product, due on Wednesday; and non-farm payrolls for this month, due on Friday.
** Indonesian 10-year benchmark yields rise 1.5 basis points to 6.982%
** Singapore's stock index snaps four-day losing streak
** No sign of new protests in Beijing, Shanghai on Monday - Reuters