Most emerging Asian currencies, similar to the dollar, moved only marginally on Tuesday as markets awaited the first US congressional testimony by new Federal Reserve Chairman Jerome Powell. The dollar edged down slightly, but was still above its three-year low. The dollar's index against a basket of six major currencies inched down 0.1 percent to 89.728.
Powell's testimony later in the day is seen as critical for financial markets at a time many investors are nervous about the Fed's policy normalisation following years of stimulus after the financial crisis almost a decade ago. The 10-year US Treasuries yield eased to 2.864 percent, dropping further from its four-year peak of 2.957 percent touched on February 21, driven by month-end buying as well as position adjustments ahead of the testimony.
Among Asian currencies, the Philippine peso was the biggest drag, falling as much 0.4 percent, marking its biggest intraday percentage loss in over a week. The peso has been the weakest Asian currency this year, shedding more than 4 percent against the dollar, partly due to concerns on trade and current account deficits.
A Reuters poll last week saw investors turn more bearish on the peso, with short positions at their highest since November 2016. Malaysia's ringgit shed about 0.2 percent. The Indian rupee also declined the same percentage before paring some of its loss.
The Singaporean dollar and the Indonesian rupiah were little changed. The Korean won firmed 0.1 percent against the dollar.
The Bank of Korea held its benchmark interest rates at 1.50 percent due to muted inflationary pressure and caution ahead of any further monetary tightening in the United States. The Taiwan dollar, the Thai baht and China's yuan also inched up 0.1 percent.
The Chinese currency gained against the dollar on Tuesday, helped by the combination of a higher official midpoint and corporate sales of the greenback. Prior to market opening, the People's Bank of China (PBOC) raised its official yuan midpoint the most in nearly one month, to 6.3146 per dollar, reflecting a stronger spot yuan performance from a day earlier.
As of midday, onshore spot yuan was changing hands at 6.3062, 41 pips firmer than the previous late session close and 0.13 percent stronger than the midpoint.
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