The Thai baht touched its strongest level in over five months on Tuesday thanks to inflows into stocks and bonds and an upturn in tourism revenues after the resumption of a quarantine waiver for foreign visitors, while other Asian currencies were mixed.
The Thai baht rose as much as 0.7% for a second consecutive session.
"There is a combination of factors that has led to the Thai baht beating its peers," Mitul Kotecha, senior EM strategist at TD Securities said.
Kotecha went on to list some supportive factors, including optimism over the reopening the tourism sector despite rising COVID-19 cases, plus Thais receiving baht when they took profits on gold prices at eight month highs.
Otherwise, geopolitical tensions in Ukraine kept investors wary of riskier assets, and they were also watching out for the minutes from the U.S Federal Reserve's latest meeting, which will be released on Wednesday and could give futher clues to how fast US interest rates will rise.
Geopolitical risks weigh on Asian FX as dollar stays buoyant
"That said, with aggressive rate hike bets already in place, it does question how significant the minutes may be in shifting expectations," analysts from IG Group said in a research note.
The Indonesian rupiah appreciated as much as 0.4% to touch its highest level since Jan. 11, while South Korean won declined 0.7%, a day after it firmed 0.6%.
The rupiah's gains came ahed of the release of Indonesian trade data, which is expected to show a reduced surplus due to a ban on coal exports that was imposed at the start of the year.
Higher energy prices underpinned the Malaysian ringgit , which rose for the third consecutive session, gaining about 0.1%. Malaysia is one of the world's largest exporters of liquefied natural gas.
Asian equities were also mixed, with Indonesian shares rising 0.7%, leading the gains and logging its best session in a week.
The Thai, Malaysian and Chinese markets' key share indexes rose in the range of 0.3% and 0.5%.
However, shares in Singapore, the Philippines and South Korea were down between 0.3% and 0.6%.
The Philippines central bank is likely to stay pat on interest rates to support economic growth on Thursday, according to a Reuters poll.
Highlights
** India's retail inflation tops 6% but no rate rise seen for now
** China c.bank injects $47.2 bln via medium-term loans, rate unchanged
** Indonesian 10-year benchmark yields edges up to 6.518%
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