Most emerging Asian currencies rose against the dollar on Tuesday, on hopes trade negotiations between the United States and China will resume this week and make progress in spite of President Donald Trump's threat to raise tariffs on more Chinese goods. China's foreign ministry has confirmed that a Chinese delegation is preparing to go to United States for talks.
Trump's threats to raise tariffs on $200 billion of Chinese goods and target hundreds of billions more soon roiled Asian financial markets on Monday.
"Markets may be looking at US-China negotiations from a glass half-full perspective," Chang Wei Liang, an FX strategist at Mizuho Bank said.
"The response from the Chinese side has been quite muted - they haven't cancelled trade talks with Washington so there is a chance they can find some common ground to defer implementation of tariffs for a second time."
The South Korean won, trading again after a holiday on Monday, strengthened 0.1 percent against the greenback, while the Singapore dollar edged higher. The Malaysian ringgit barely moved ahead of the central bank policy decision due at 0700 GMT.
A slim majority of analysts in a Reuters poll forecast Malaysia will to cut its benchmark rate by 25 basis points to 3.00 percent to cope with slowing growth.
The Malaysian government has already cut growth forecasts for the year and projected a drop in export expansion, as it continues to face risks from slowing global growth and the US-China trade war.
The Philippine peso moved in and out of positive territory after data showed annual inflation slowed for a sixth consecutive month in April, reinforcing views the central bank will loosen its grip on monetary policy to support economic growth.
China's yuan weakened for a fourth straight session, shedding 0.3 percent to the dollar. Prior to market opening, China's central bank lowered its official yuan midpoint to a fresh 2-1/2-month low at 6.7614 per dollar.
The Thai baht which resumed trading after a holiday, strengthened 0.4 percent against the dollar, the biggest intraday gain in more than a month. The baht remains emerging Asia's top performing currency this year, after outperforming peers in 2018.