Most Asian currencies held within a narrow range on Monday, while the dollar was steady as attention focused entirely on progress toward ending the long-running US government shutdown.
The Chinese yuan showed little reaction to data showing a slight improvement in inflation, while the Japanese yen weakened amid growing doubts about an immediate interest rate hike by the Bank of Japan.
Regional markets faced a lack of key trade indicators, while caution over a potential US interest rate cut in December kept traders on the sidelines.
The dollar is stable as the government shutdown is monitored.
The dollar index and dollar index futures rose by about 0.1% each in Asian trading, stabilizing after posting slight declines last week.
The focus was entirely on Congress's efforts to end the long-running government shutdown, which entered its 40th day on Sunday.
A number of reports indicated that a group of Senate Democrats agreed to support a Republican bill aimed at funding the government until January 30.
The Senate vote on the bill was still ongoing as of 03:33 Saudi time.
This shutdown, the longest in US history, disrupted government services nationwide. Markets were concerned about its economic impact, as the shutdown also delayed the release of several key government data points.
The Chinese yuan moved slightly following positive consumer price index data.
The Chinese yuan pair USD/CNY held steady at 7.1209 yuan on Monday, showing limited reaction to positive inflation data.
Consumer price index inflation rose more than expected in October, while producer price index inflation contracted at a slower rate than anticipated.
These results were driven by strong holiday spending, although analysts were hesitant to see them as a recovery from China’s long-term deflationary trend.
These gains largely reflect temporary factors, most notably higher gold prices, and do not indicate that China's deflation problem is going away, Capital Economics analysts wrote in a note.
Broader Asian currencies moved within a stable to lower range. The USD/JPY pair rose by approximately 0.4%, amid waning confidence that the Bank of Japan will raise interest rates soon.
The Australian dollar pair AUD/USD rose by 0.3%, while the Singapore dollar pair USD/SGD added 0.1%.
The Taiwanese dollar pair USD/TWD rose by 0.1%, while the Indian rupee pair USD/INR remained stable.
