Emerging Asian currencies advanced against a softer dollar on Monday, with Taiwan's currency posting the strongest gains, while regional stock markets were largely unmoved as investors awaited fresh cues to determine direction.
The MSCI gauge of EM currencies rose 0.2% to hit a record high, helped by gains in the Taiwan dollar, which rose 0.5% to clock its highest level in over six weeks.
MSCI's emerging market equities index climbed 0.7% to its highest level since July 10, supported by gains in Taiwan, one of its largest constituents.
Stocks in Taipei advanced 0.8%, extending a blistering 2026 rally that has left the benchmark up 58.7% so far this year. Sustained foreign appetite for AI-linked chipmakers continued to support sentiment toward the island's tech-heavy market.
HSBC analysts said the Taiwan dollar could regain some ground as dividend-related outflows from Taiwan ease. South Korea's KOSPI, one of the world's best-performing stock markets this year with gains of 65.6%, was closed for a public holiday.
However, the won firmed 0.4%, extending its gains for the year to 1.7%. HSBC also expects support from foreign investors selling more South Korean equities than Taiwanese shares, and from South Korean retail investors continuing to buy U.S. stocks.
In Thailand, the baht was little changed after data showed the economy expanded 1.9% in the second quarter, exceeding expectations.
The state planning agency also lifted its full-year growth forecast. The currency was last up 0.2% while the benchmark index advanced over 1%.
Elsewhere in the region, uncertainty around the Middle East conflict left other regional stock markets largely rangebound.
Among currencies, a softer dollar index lent support, with the dollar index hovering around its lowest level of the month. Soft U.S. payrolls and inflation data earlier in the month prompted markets to scale back expectations of further policy tightening.
Malaysia's ringgit inched 0.2% higher after data showed its consumer price index rose 1.8% in July from a year earlier, slightly less than forecast.
Data showed Japan's economy grew at a slower-than-expected pace in April-June, due to lacklustre household spending and business investment.
The yen was up 0.1% while the Nikkei index added 0.3%. Indonesia's markets were shut for a holiday, with investors awaiting Bank Indonesia's policy decision on Wednesday.
The central bank is expected to keep its benchmark interest rate at 5.75%, after surprising markets last month by leaving rates unchanged and introducing new incentives to attract capital inflows and support the rupiah.
HIGHLIGHTS:
** Philippine central bank says inflation to ease gradually, risks remain on upside
** From kangaroos to dim sum, foreign borrowers rush into Asia-Pacific bond markets
** Search for Indonesia quake victims underway on Independence Day - Reuters
