Asian currencies rose on Monday as falls in the U.S. stock market and Treasury yields kept the U.S. dollar range-bound, and made regional currencies relatively more attractive bets.
Downside to the U.S. dollar and government bond yields came from President Donald Trump's verbal intervention on Thursday, when he told the Wall Street Journal the dollar was "getting too strong" and that he would prefer the Federal Reserve to keep interest rates low.
The dollar index, which tracks the U.S. unit against a basket of six rival currencies, fell 0.17 percent to 100.390 on Monday.
The 10-year U.S. Treasuries yield fell to 2.200 percent on Thursday, before market holiday on Friday, hitting their lowest level since mid-November.
U.S. Treasury benchmark yields also hit near five-month lows on Thursday, after Trump's comments intensified a bond market rally, which was also underpinned by worries about potential U.S. military strikes against North Korea.
"Asian currencies excluding Japan are caught between two forces: on the one hand, the U.S. dollar is weighed by the break of the U.S. 10-year bond yield below its four-month range," said Philip Wee, senior currency economist, at DBS Bank.
"On the other hand, Asia ex-Japan currencies are uncomfortable with the drag from U.S. stocks on their equity markets."
Major U.S. stock indexes fell on Thursday, for a third straight session, after retail sales dropped more than expected in March, and annual core inflation slowed to 2.0 percent, data showed.
The soft U.S. data further dented investor confidence in the U.S., which was already frayed by worries over North Korea's failed attempt to launch a missile on Sunday.
The missile launch added to existing regional unease after U.S. President Donald Trump took a tough rhetorical line with Pyongyang, and urged China to do the same.
"Asian forex markets remain vigilant regarding the sabre-rattling between the U.S. and North Korea. For now, U.S. may be looking to first work with allies (especially China) on non-military options on North Korea," Wee added.
The Singapore dollar gained 0.18 percent versus the dollar after export growth beat expectations in March, buoyed by petrochemical and pharmaceutical shipments, data showed on Monday.
The Taiwan dollar rose 0.28 percent to stand at 34.240 against the U.S. dollar, on relief that the U.S. Treasury did not name it as a currency manipulator. However, Taiwan has been retained on the U.S. Treasury's monitoring list for trade practices.
The Philippine peso, however, fell 0.25 percent against the dollar, after four straight session of gains, with inward remittances, foreign inflows into stocks and weak U.S. data weighing on the currency.
Strong capital inflows in the past few sessions have kept the peso buoyant with analysts expecting the prospects of a tax amnesty plan raising hopes for potential inflows.
The yuan was little changed against the U.S. dollar on the day, barely reacting to data that showed the Chinese economy grew 6.9 percent in the first quarter from a year earlier.
In a highly anticipated report released Friday, U.S. President Donald Trump's administration declined to name any major trading partners as currency manipulators, confirming a decision to back away from his key campaign promise to slap such a label on China.
The semi-annual U.S. Treasury currency report, however, decided to retain China on a currency "monitoring list" despite Beijing's progress in reducing its global current account surplus, citing its unusually large trade surplus with the United States.
The Treasury report also kept five other trading partners on the monitoring list: Japan, South Korea, Taiwan, Germany and Switzerland.
The yuan did not react to the Treasury report either.
(Reporting by Aparajita Saxena in Bengaluru; Editing by Sam Holmes)