Most emerging Asian currencies gained ground against a muted dollar on Wednesday as investors stood on the sidelines to assess the future rate cut path by the Federal Reserve, while a potential ceasefire in the Middle East aided risk sentiment.

Thailand’s baht appreciated as much as 0.8% to 33.310 per dollar, leading gains among currencies.

It is the second-best performing currency in the region, after the Malaysian ringgit, with a 2.4% gain year-to-date.

The currency of Southeast Asia’s second-largest economy has been buoyed of late by sustained Fed rate cut bets, stabilising politics and economic growth.

“For the baht, there could be some USD-selling interest from market players especially exporters as they have been waiting for the baht to weaken a bit,” said Poon Panichpibool, a markets strategist at Krung Thai Bank.

At 0420 GMT, the dollar index remained steady at 102.59.

Other currencies such as the Indonesian rupiah and Taiwan dollar traded about 0.4% and 0.3% higher, respectively.

The Philippines peso was a notable outlier, falling about 0.3% to its lowest since mid August.

Investors are now awaiting a crucial inflation print for September from the world’s largest economy as well as minutes from the Fed’s recent meeting later on Wednesday to gain a better sense of where interest rates could be headed.

In Asia, the Reserve Bank of India kept its key interest rate steady at 6.50% as expected, while changing its policy stance to neutral, opening the door to cuts as the economy shows some signs of cooling.

Asian currencies: Malaysian ringgit slips to 3-week low

The Bank of Korea is expected to move with a 25-basis point cut in its meeting later this week.

“Until the sentiment-driven market aligns with the Fed’s underlying outlook for lower inflation and interest rates, currencies are likely to lack direction from markets over-reacting to better- or worse-than-expected data,” analysts from DBS wrote.

A potential ceasefire in the Middle East provided relief to sentiments which helped Asian stock markets to make some headway.

Other shares in Singapore, Bangkok, and Kuala Lumpur traded between 0.1% and 0.4% higher.

Meanwhile, equities in Shanghai snapped a seven-day winning streak to trade 5.3% lower, paring all gains from the previous session.

The index had risen as much as 10.1% on Tuesday on anticipation of more strong stimulus measures from Beijing which failed to materialise.

Markets in South Korea were closed due to a public holiday.