SINGAPORE: Most Asian currencies and equities lost ground on Tuesday as the United States banking sector crisis unnerved investors, although the Malaysian ringgit bucked the trend to climb higher.
US regional bank shares saw heavy selling overnight following the shutdown of Silicon Valley Bank SIVB.O and Signature Bank SBNY.O.
"Investors will closely watch the US CPI (consumer price index) reading released tonight, though it is likely to take a back seat to the current banking crisis," analysts at OCBC Bank said in a note.
The CPI for February is expected to rise 0.4% on a month-over-month basis, and 6% annually, according to a Reuters poll. The data has taken on added relevance in recent days following the turmoil in the banking sector and could further complicate views on Federal Reserve's stance on rate hikes.
The Thai baht and Singapore dollar traded marginally lower, while the South Korean won KRW=KFTC lost 0.7%.
The Indonesian rupiah IDR=ID weakened 0.1%. The country's central bank is expected to hold interest rates at 5.75% at its meeting on Thursday despite inflation remaining high.
Equities in the region tracked Wall Street lower, with benchmarks in Indonesia .JKSE, Malaysia .KLSE and Thailand .SETI slipping more than 1%.
Philippine stocks .PSI were down nearly 1% and the peso PHP= edged 0.07% higher after the country posted its widest trade deficit in five months for January.
Meanwhile, the Malaysian ringgit was the top gainer in the region, rising 0.3%.
Investors seem to be more relieved about the pace of rising prices in the country after the central bank held rates at 2.75% last week, said Poon Panichpibool, markets strategist at Krungthai Bank.
"Once the market reprices the Fed hike, there would be less of a spread between policy rate in Malaysia and the US, so that's likely to support the Malaysian ringgit compared with other emerging Asia forex," Mr Poon added.
A customer is escorted into the Silicon Valley Bank headquarters in Santa Clara, California, on Monday. (Photo: Reuters)
Elsewhere in the region, stocks in China .SSEC and its local unit CNY=CFX lost 0.4% and 0.3%, respectively.
The People's Bank of China is set to inject more liquidity when rolling over maturing medium-term policy loans for a fourth straight month on Wednesday, while keeping the interest rate unchanged, to support the economy, a Reuters survey showed.