On Tuesday, there was little movement recorded in most Asian currencies, as markets were waiting for a speech from Jerome Powell, the chairman of the Federal Reserve.
Meanwhile, there was a rise in the Australian dollar after the Reserve Bank increased the interest rates and also signaled more hikes to come in the future.
There was a 0.7% increase in the Australian dollar to $0.6929, which brought it close to the important level of 0.7 against its American counterpart.
There was a 25 basis points hike in the interest rate by the Reserve Bank of Australia (RBA) as expected, but it flagged additional hikes in the future to battle red-hot inflation.
Most of the Asian currencies remained muted for the day, anticipating Powell to give more economic cues in his speech scheduled later in the day at the Economic Club of Washington D.C.
The comments of the Fed chairman about monetary policy and inflation will be closely monitored, particularly after the nonfarm payrolls data on Friday turned out to be stronger than expected in the previous week.
On Tuesday, there was also a decline in the greenback against a basket of its peers, while there was a 0.1% drop in the dollar index futures and dollar index each.
However, both instruments were able to retain most of the gains they had made on Friday after the release of the payroll data.
After the better than expected payroll data, markets ramped up their expectations of additional interest rate hikes from the US Fed this year.
This does not bode well for Asian currencies because it reduces the gap between risky and low-risk yields.
As far as regional currencies are concerned, there was a 0.1% rise in the Chinese yuan, while a 0.4% gain was also recorded in the South Korean won.
There was also a 0.3% gain in the Japanese yen, as media reports added to speculation about who would take over as the new governor of the Japanese central bank.
It had been reported that possible candidates to succeed the existing governor Haruhiko Kuroda, whose term ends in April, would be announced in the next week.
Whoever succeeds Kuroda would have to deal with the daunting task of balancing the ultra-loose monetary policy that the Bank of Japan (BOJ) has adopted against high inflation.
Markets believe that there would be a hawkish pivot, but the speculation has seemed to benefit the Japanese yen so far.
On Tuesday, the worst performers of the day were the Southeast Asian currencies, as there was a 0.7% and 1% decline in the Indonesian rupiah and the Malaysian ringgit, respectively.
There was also a 0.9% drop in the Philippine peso, even if the consumer price index (CPI) print turned out to be higher than expected for the previous month.
While the Philippine central bank is expected to deliver more interest rate hikes after the reading, it also means more pressure on the economy, which is certainly not a good thing.