Most Asian currencies edged up against the dollar on Wednesday as signs of easing US-China trade tensions boosted risk appetite, with the Chinese yuan leading gains. The Indian rupee, on the other hand, eased off a little on a sharp bounce in oil prices and as investors remained cautious after the appointment of Shaktikanta Das as the new Reserve Bank of India governor.
The Chinese yuan strengthened as much as 0.4 percent to 6.873 in early trade, but by 0515 GMT it had pared some of its gains.
US President Donald Trump, in an interview with Reuters, said talks were taking place with Beijing and he would not raise tariffs until he was sure about a deal.
Further soothing the tense relations between the world's largest economies, Trump said he would intervene in the Justice Department's case against a top executive at China's Huawei Technologies if it served national interests or helped close a trade deal with China.
Markets rallied on Tuesday after a Trump administration official said that China agreed to cut tariffs on US built cars and auto parts to 15 percent from the current 40 percent.
"This does signal a small step towards trying to work on a consensus to reduce trade tensions and work on a deal that could satisfy the US trade demands and allow trade to normalize or at least prevent another round of escalation of tensions," said Chang Wei Liang, FX strategist at Mizuho Bank.
"Asian markets are somewhat buoyed by this development."
The Taiwan dollar tacked on 0.2 percent against the greenback to a one week high, while Korean won and the Thai Bhat also advanced a little. The Malaysian rinngit trod water.
Gains in the Philippine peso were capped ahead of the country's central bank policy meeting on Thursay. Analysts expect the Bangko Sentral ng Pilipinas to hold interest rates steady after five consecutive rate hikes.
The rupee weakened 0.2 percent to 72.010 per dollar as investors took stock of the changes at the helm of the central bank.
Das, an ex-finance ministry official, was ushered into the top post in a swift appointment a day after the surprise resignation of former governor Urjit Patel. It followed clashes with the government, which wants more economy boosting measures ahead of a general election.
In a note to clients, OCBC Bank said "the appointment of Shaktikanta Das (former bureaucrat) as the new RBI governor is likely to fuel more dovish expectations of the RBI's posture, and also of RBI independence."
The country's inflation data is due later in the day, with November inflation expected to have cooled to a 16-month low.
"There could be scope for volatility depending on how the RBI monetary meeting on Friday evolves," said Chang.
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