Asian currencies rose to multi-week highs on Monday after risk sentiment improved as U.S. President Donald Trump's tariff threats were deemed largely rhetorical, while Singapore stocks hit a record high despite losses in other share markets.
The South Korean won led the rally, adding as much as 0.7%, its highest since December 6. The Malaysian ringgit followed suit, appreciating 0.5% to its highest level since January 31.
The Singapore dollar and Thailand's baht also gained 0.3% each. The MSCI index of emerging market currencies rose by up to 0.13%, reaching its highest level in more than three months.
However, the U.S. dollar began the week on a negative note, declining 0.4% to its lowest since December 10.
The greenback has shed 3.4% since Trump postponed tariffs on Canada and Mexico in early February, as traders interpreted his tariff threats as primarily bluster, dampening enthusiasm for fresh dollar holdings.
"I think the US Dollar has moderated because the Trump administration is taking a slower and more considered approach to trade restrictions," said Kyle Rodda, senior financial market analyst at Capital.com.
The market on Monday is likely to be mildly positive toward emerging Asia, said Poon Panichpibool, a markets strategist at Krung Thai Bank.
But caution is warranted as March approaches given ongoing uncertainties about Trump's delayed tariffs on Canada and Mexico and Russia-Ukraine peace talks, he added.
Regional equities suffered losses, with those in Thailand and India retreating more than 1% each, while shares in Indonesia and Malaysia declined nearly 1% each.
"The risk-off sentiment in the US market on Friday may weigh on EM Asia equities, although Hong Kong's market is likely to be buoyed by Chinese tech giants, particularly after Alibaba's impressive earnings results," Panichpibool said.
Shares in Singapore, however, rose 0.6% to a record high of 3951.6 points, following the Singaporean government's plans to invigorate its equities market, including a S$5 billion ($3.75 billion) programme that focuses on investing in domestic stocks.
These initiatives, coupled with factors such as inexpensive valuations and high dividend yields, led JPMorgan analysts to upgrade Singapore equities to "overweight" last week.
A tech rout on Wall Street impacted the South Korean and Taiwanese markets, with stocks in Seoul losing 0.6% and shares in Taipei falling 0.9%.
Thai stocks were pulled down by property developer WHA Corporation, the top loser on the benchmark, plunging over 15% after announcing that Mobilix Company would acquire its WHA Future Energy unit for 59.24 million baht ($1.77 million).
Later in the week, Thailand's central bank is expected to maintain interest rates, mirroring its regional peers in the Philippines and Indonesia.
The Bank of Korea is widely anticipated to implement a quarter-point rate cut on Tuesday.
HIGHLIGHTS:
** German election victor Merz plans pivot from US as coalition talks loom
** Indonesia's Prabowo officially establishes new sovereign wealth fund
** Stock market in Japan closed for a national holiday - Reuters
