The yuan firmed against the dollar on Tuesday after China's central bank raised the yuan midpoint to 6.6273 a dollar, above the 6.6493 midpoint on Monday. According to Reuters, this was the first time the reference point was set higher since Sept. 22. The on-shore yuan traded at 6.5956 to the dollar at 3:16 p.m. HK/SIN, while the offshore yuan traded at 6.5848 to the dollar.
Other Asian currencies also followed the yuan's lead to strengthen against the greenback, with the U.S. dollar last shedding 0.22 percent against the Singapore dollar.
The dollar index, which tracks the greenback against six major rivals, slid to 93.527 at 3:16 p.m. HK/SIN. Against the yen, the U.S. currency last fetched 112.64, off the 112.82 high touched earlier in the session.
The yuan's climb higher was the driving force behind the broader dollar sell-off, said Stephen Innes, Asia Pacific head of trading at OANDA. With the 19th party congress due to begin in China on Oct. 18, the central bank was likely attempting to provide "overriding stability" in the market and a better platform to encourage foreign investment into China, he added.
The Turkish lira pared some losses to trade at 3.6828 to the dollar at 3:17 p.m. HK/SIN after falling steeply against the dollar on Monday after a diplomatic row between Turkey and the U.S. saw the countries suspend visa services for each other. The deterioration in ties followed Turkey's arrest of a local employee working at the U.S. consulate in Istanbul for supposed ties to a U.S.-based cleric accused of planning a failed coup in 2016.
"Although the spat is quite specific, markets will be on the look-out for any signs of contagion into other emerging markets," said Giulia Lavinia Specchia, an economist at ANZ, in a morning note.
Stocks on Wall Street closed a tad lower on Monday after relatively quiet trade as earnings season loomed. The Dow Jones industrial average shed 0.06 percent, or 12.6 points, to close at 22,761.07.
In corporate news, the chief executive of Fiat Chrysler said he wasn't certain if a merger with Great Wall Motor was the right solution, Reuters reported on Monday. The Chinese automaker had expressed interest in acquiring the company in August. Shares of Great Wall traded in Hong Kong were off 0.61 percent by 3:18 p.m. HK/SIN.
Meanwhile, the Singapore Exchange submitted a query into "unusual price movements" in the shares of agri-business company Olam International. Olam's stock was up 4.21 percent at 3:21 p.m. HK/SIN.
In Japan, Kobe Steel saw its shares plummet after the company admitted to falsifying data on its products to indicate it met specifications requested by customers, Reuters reported. Shares of the company closed down 21.93 percent.
On the energy front, oil prices edged up following overnight comments out of OPEC that more could be done to tackle to oversupply in global oil markets. The bloc will next meet on Nov. 30. Brent crude rose 0.45 percent to trade at $56.04 a barrel and U.S. crude futures tacked on 0.38 percent to trade at $49.77.
In economic news, China foreign exchange reserves increased by $17 billion in September to $3.109 trillion, Reuters said, citing data from the People's Bank of China. The eighth consecutive monthly rise in the country's forex reserves was attributed by Reuters to strict capital outflow regulations and a firmer yuan.
Japan's current account surplus for August came in at 2.38 trillion yen ($21.12 billion), according to Reuters. That was above the 2.26 trillion yen estimated by economists in a Reuters survey.