Asian units 'uninspired' by trade deal optimism

Emerging Asian currencies took less heart than the dollar from signs of progress in US-China negotiations for a preliminary deal to end a prolonged trade war, as investors refused to get carried away without more detail on the content of talks.

China's Commerce Ministry said top trade negotiators from both sides held a phone call on Tuesday, and discussed "core issues of concern".

"Asian currencies seem to be uninspired in spite of encouraging headlines on the US-China trade deal as concrete details of the trade talks have been lacking," Fiona Lim, senior FX strategist at Maybank, said.

China's foreign ministry summoned US Ambassador Terry Branstad on Monday to protest against the passing in the US Congress of the Hong Kong Human Rights and Democracy Act, saying it amounted to interference in an internal Chinese matter.

China's yuan inched up, helped by a slightly firmer central bank fixing, while trade-sensitive South Korean won erased early gains to slip 0.1%.

The Singapore dollar was marginally lower.

Data on Tuesday showed Singapore' industrial output unexpectedly rose in October, helped by a recovery in electronics manufacturing - a key driver of growth for the city-state. Meanwhile, the Taiwan dollar gained 0.1% to the dollar. The island's trade-reliant economy posted a 2.9% fall in industrial output for October, compared to a year earlier, data on Monday showed.

The Indian rupee was the top performer in the day, advancing 0.2% to the dollar. Focus will now turn to the release of second quarter growth figures on Friday. The Indian economy expanded 5.0% in the April-June quarter on a year earlier, its slowest annual pace since 2013, and was expected to grow 4.7% last quarter, according to a Reuters poll.

The Malaysian ringgit depreciated 0.1% to the dollar, weakening for a seventh straight day.

Analysts said that uncertainties surrounding the US-China trade deal and domestic political issues were weighing on the ringgit. Earlier this month, Malaysia's ruling coalition suffered its worst electoral defeat since coming to power last May, uncovering deepening cracks in an alliance mired in uncertainty over a succession plan once Prime Minister Mahathir Mohamad retires.