Asian currencies rose on Wednesday after weak US consumer sentiment data dented the dollar, but doubts over the longer-term trend in the majors had local markets wavering.
The Singapore dollar was up a cent from the previous day and straddled 1.69 per dollar while the Korean won rose to near a key resistance level of 1,170.
The Japanese yen was flirting with levels close to 108 per dollar in late deals and the euro had recovered lost ground and was approaching $1.27.
"The dollar is in a consolidated mood, but the factors weighing on it have not changed," said Jimmy Koh, head of research at United Overseas Bank.
Markets could be choppy until US employment data is released next week although Federal Reserve Chairman Alan Greenspan's testimony on Wednesday was expected to provide some clues, traders said.
Singapore was due to release GDP data on Thursday. Meanwhile, China's much-debated exchange rate peg remained in the spotlight, with US Treasury Secretary John Snow saying he believed Beijing was committed to moving to a flexible currency arrangement, but it would take time.
A delegation of US Treasury officials is in Beijing this week to hold talks on financial co-operation, and the yuan is widely expected to feature on the agenda.
But markets have shrugged off the US visit as no imminent change is expected, and yuan non-deliverable forwards have barely moved.
One-year NDFs were still around -4,500 points, pricing in a 5.7 percent rise in the yuan in a year.
The Taiwan dollar moved in a 33.22-33.24 range, levels seen late last week before the dollar's surge pushed it to four-week lows.
Markets in the Philippines were closed for a holiday.
The Indonesian rupiah recovered from Tuesday's two-month lows near 8,475 per dollar and was supported by expectations of a $142 million inflow for the government's sale of a stake in PT Bank Lippo Tbk.
Like Koh, most analysts believe the US dollar will soon head lower again and markets are holding on to their bigger long term bearish-dollar positions.
"We could be choppy for a while longer but we see the dollar grinding back down again," said Cliff Tan, markets strategist with Citigroup in Singapore.
"The adjustment last week was pretty much positional on the part of some small players but we don't actually think that longer-term structural bear dollar positions have adjusted yet."
Citigroup's Tan said the fundamentals, in terms of interest rate differentials or the adjustment of the huge US current account deficit, had not really changed.
"In the absence of real tangible changes there, I think the odds favour betting for dollar weakness again after the correction last week," he said.
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