Most Asian currencies inched higher on Monday against the dollar, as Beijing's pledge to support its economy and companies steadied the yuan, but risk sentiment was limited by a blend of geopolitical tensions including the U.S-China trade spat. China's yuan was a little lower against the dollar that was little changed against major currencies. A rally in mainland stocks due to expectations of support measures for the economy and corporates had helped limit the yuan's decline.
"When China stock market sentiment improves, it can improve regional market sentiment, so the Korean won, Taiwan and Singapore dollar, all benefited from that," said Gao Qi, FX strategist at Scotiabank in Singapore.
The Singapore dollar strengthened 0.1 percent, while South Korean won was the biggest climber in the region, reversing earlier losses to climb 0.4 percent at 1127.9 against the dollar. The Thai baht, traded unchanged after a brief 0.1 percent slip when its customs-cleared exports, a key driver of Thai growth, defied analyst expectations in September and dropped for the first time in 19 months, data showed.
The Indonesian rupiah traded slightly weaker, ahead of a key central bank meeting on Tuesday.
Bank Indonesia is expected to leave its policy interest rate unchanged , according to a Reuters poll, though some analysts said the central bank's tightening cycle is not over.
Indonesia, whose currency remains one of the worst performers year-to-date, has been grappling with a high current account deficit.
The outlook for global growth in 2019 has dimmed for the first time, according to Reuters polls of economists who cautioned that the US-China trade war and tightening financial conditions would trigger the next downturn.
The yuan weakened slightly despite the People's Bank of China (PBOC) setting the midpoint rate about 0.2 percent firmer than the previous fix.
Though the cheer in stocks supported the currency, traders were generally of the view that the yuan will be left to depreciate over coming months so long as its decline is not rapid or disorderly.
Coordinated statements of support for plunging equity markets by senior Chinese regulators offered respite to the currency.
"Any verbal intervention could turn out to be ineffective in the medium term if fundamentals fail to warrant a sustainable rebound. Looking ahead, the market will continue to monitor how the Chinese economy weathers the external shocks from the trade war as well as weak domestic investment," OCBC said in a note to clients.
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