Most emerging Asian currencies moved in tight ranges on Monday, as market participants awaited more concrete details on a phase one trade agreement between the United States and China that was announced last week.
While both sides have cancelled their plan to impose fresh tariffs on each other, the United States has decided to reduce some tariffs in exchange for what US officials said would be a big jump in Chinese purchases of American farm products and other goods.
However, a date for senior US and Chinese officials to formally sign the agreement is still being determined, US Trade Representative Robert Lighthizer said on Sunday.
"They have moved around the jigsaw pieces a little to make it appear like two-way concessions were exchanged, but none of the commitment is contractual just yet," Mahesh Sethuraman, deputy head of global sales trading at Saxo Capital Markets said.
"US hopes the deal will be signed off in January, while China is not quite singing from the same song sheet. What the announcement has done is to take away the possibility of a breakdown in talks for the near term."
Analysts also said the markets were expecting a greater rollback of US tariffs as the deal left 25% of tariffs on $250 billion worth of Chinese imports unchanged. The Chinese yuan strengthened marginally against the dollar, even after the central bank lifted its official yuan midpoint to the highest level in over four months on Monday.
On the brighter side, data earlier in the day showed China's industrial and retail sectors beat expectations in November, as government support propped up demand in the world's second-largest economy. The South Korean won was flat, while the Singapore dollar was marginally lower. The Indian rupee weakened 0.2%.
The Indonesian rupiah also slipped 0.1%, after data showed Southeast Asia's largest economy posted its biggest trade deficit in seven months. The Taiwan dollar was the sole outlier in the day, appreciating 0.4% against the greenback to its strongest level in over a month on the back of higher equity market inflows.
Foreign investors purchased $729.4 million worth of Taiwan equities so far this month, compared with outflows of $318 million in November, according to Refinitiv data. Taiwan's economy has largely benefited from manufacturers moving production back home to avoid higher tariffs and reduce business disruption.
Investors will now focus on Taiwan's central bank policy rate decision on Thursday, with analysts at DBS Bank expecting the central bank to stand pat amid little pressure to cut rates to support growth.