Asian currency markets were shackled in a tight space on Monday, with investors content to hold most of their bets in light of uncertainty over the progress made in US-China trade talks.
Over the weekend, US national security adviser Robert O'Brien said that an initial agreement is still possible by the end of the year, but warned Washington would not turn a blind eye to what happens in Hong Kong.
"The currency market is a bit fatigued on the trade side tired of the alternating hot and cold headlines....the expectations are quite low right now in terms of what the deal would involve," Sim Moh Siong, FX strategist at Bank of Singapore said.
Moves in currency pairs were slight, with the Philippine peso managing to tack on 0.3% against the dollar, while the Chinese yuan firmed 0.1%.
"I don't know whether to use the word cautiously optimistic because we were there before and then we went to cautiously pessimistic...markets seem to now be stuck in a limbo territory," Siong added, referring to the small gains in the market.
The Singapore dollar barely reacted to key inflation readings for the city-state, while the Indian rupee edged higher.
Data on Monday showed that Singapore' core inflation rate eased to its weakest level in over three years in October.
The Taiwan dollar traded flat ahead of the release of industrial output figures for October, while the Thai baht was off 0.1%.
The country's central bank on Saturday said it would ease rules governing the foreign exchange market and international reserves, giving it more scope to tackle the baht's strength following a series of rate cuts.
The baht has risen nearly 8% on the dollar this year, underpinned by Thailand's large current account surplus, high foreign reserves and low foreign debt. The South Korean won advanced 0.3% against the
Han Tan, a market analyst at FXTM, said the won was likely being supported by market expectations the Bank of Korea will keep its benchmark interest rates unchanged at its policy meeting on Friday. The BOK cut the policy rate by 25 bps in October to prop up a stuttering economy.
"The fact that the won has been Asia's most volatile currency in recent weeks underscores the fluctuating levels of optimism surrounding the US-China trade deal," Han Tan, Market Analyst at FXTM said.
The won, one of the most sensitive currencies to trade-related headlines given its reliance on tech exports, has lost just over 5.0% against the dollar this year.