Most Asian currencies rose on Thursday as investors awaited new catalysts after pricing in policy and geopolitical cues over the week, with the rupee at its firmest since the start of the year. Amid headlines from China's annual parliamentary meeting and monetary policy cues in other parts of Asia over the week, investors are awaiting progress on a trade deal as Washington and Beijing have been locked in intense negotiations to end a months-long trade war.
The dollar index, which measures the greenback against a basket of six key rivals, traded sideways on Thursday at 96.878. The Philippine peso, which fell sharply earlier this week on cooling inflation and a new central bank governor that spurred talk of policy easing, rose 0.2 percent to 52.1.
Meanwhile, the Indian rupee fell below the 70 rupee per dollar level for the first time since early January, after a sharp rise in early trade, buoyed by rising fund inflows. The unit was last at 69.993. However, a Reuters poll showed that the rupee's weak start to 2019 is an indication of how it will perform over the coming year citing uncertainty ahead of a general election in May and a potential trade conflict with the United States.
The yuan inched up against the dollar to 6.710, paring losses from a near two-week low hit the previous session. Its value also surged on a trade-weighted basis against a basket of its trading partners' currencies, rising to 95.29, according to Reuters calculations based on official data, the highest level since early July. Indonesian markets were closed for a public holiday.
The baht edged 0.1 percent lower to 31.870, bucking the overall trend, ahead of a ruling by the Constitutional Court later on Thursday. The court will rule on whether to ban an opposition party for nominating a princess as its candidate for prime minister in a general election. OCBC said in a note on Wednesday that "tomorrow's ruling will be worth closely monitoring as it may trigger a start of heightened political risks that could derail the Thai economy."
The currency started the year with strong gains, making it the region's best performer, which raised concerns that it could harm the country's export growth. But it later eased with the central bank on Monday saying the baht is likely to remain volatile and that it had taken action on excessive moves to help the private sector adjust. A Thailand-based trader who did not wish to be named said foreign outflows have weighed on the currency as investors look to reduce their risk ahead of upcoming elections. Foreign investors have sold $244.6 million in Thai equities in March as of Wednesday's close, compared to $393.5 million of outflows in the last one month as of Wednesday's close.