Dollar ekes out gains in Asia after sharp losses

The dollar managed a small recovery against its major peers in Asia on Tuesday but retreated on most other regional units after Donald Trump's Treasury Secretary nominee said a strong currency could hurt the US economy.

Steve Mnuchin's comments came as the new president pressed on with his protectionist rhetoric, withdrawing the US from the Trans-Pacific Partnership and threatening to impose border taxes, while also warning Beijing over its designs in the South China Sea.

The developments in Washington just days after Trump was sworn in have done little to soothe investor worries that his plans to review trade deals and put Americans first could damage the global economy, particularly emerging markets.

Asian investors continued to move warily in early trade as they try to gauge what the new administration intends to do.

Mnuchin, who has yet to be confirmed in his role, said Monday in a written response to a senator's question about a 25 percent jump in the dollar: "From time to time, an excessively strong dollar may have negative short-term implications on the economy."

He also noted that it is currently "very, very strong", Bloomberg News reported.

- 'Dagger into the dollar' -

"The comments all but stuck a dagger into an already reeling greenback," said Stephen Innes, a senior trader at OANDA.

The dollar tumbled against the yen, euro and even the pound despite ongoing worries about Britain's EU exit.

The greenback edged up against them Tuesday but was down against the Indonesian rupiah, Australian and Singapore dollars, South Korean won and Malaysian ringgit.

The unit is also well off highs hit earlier this month after rallying since November on hopes Trump would enact pro-growth measures such as public works spending, lower taxes and regulatory reforms.

He confirmed on Monday he plans to pursue those priorities, but markets have been worried about the lack of detail while there is also concern of a possible trade war.

"The first couple of days of the new presidency have seen the rhetoric weighted toward protectionist policies while little detail is yet available on stimulus measures," said Ric Spooner, Sydney-based chief analyst at CMC Markets Asia.

"Unwinding free trade agreements and imposing border taxes is seen by markets as a negative for the dollar, which is not being helped by statements from the US Treasury secretary about it being overvalued."

On equities markets Tokyo ended the morning 0.1 percent down, while Shanghai dipped 0.1 percent and Seoul lost 0.2 percent.

However, Hong Kong edged up 0.3 percent and Sydney added 0.4 percent. Singapore and Taipei were slightly higher but Wellington and Manila retreated.

- Key figures at 0230 GMT -

Tokyo - Nikkei 225: DOWN 0.1 percent at 18,877.71 (break)

Shanghai - Composite: DOWN 0.1 percent at 3,135.35

Hong Kong - Hang Seng: UP 0.3 percent at 22,960.55

Euro/dollar: DOWN at $1.0750 from $1.0763

Pound/dollar: DOWN at $1.2519 from $1.2524

Dollar/yen: UP at 113.05 yen from 112.73 yen

Oil - West Texas Intermediate: UP 19 cents at $52.94 per barrel

Oil - Brent North Sea: UP 22 cents at $55.45 per barrel

New York - Dow: DOWN 0.1 percent at 19,799.85 (close)

London - FTSE 100: DOWN 0.7 percent at 7,151.18 (close)