By Shriya Ramakrishnan
Aug 24 (Reuters) - The South Korean won was the worst hit among Asian currencies as the dollar steadied on Monday, while stock markets across the region clocked modest gains on hopes for a potential COVID-19 treatment.
Some of the foreign exchange market's big players have begun to suggest the dollar's slide since May may be overdone and upbeat U.S. data on Friday along with signs of progress on coronavirus vaccines reinforced that view.
The Thai baht THB=TH, Singapore dollar SGD= and Malaysian ringgit MYR=MY were all flat to lower against the dollar.
"Clearly the unequivocal bearish USD theme has been surrendered to underlying uncertainties (virus resurgence as well as U.S.-China conflict)," analysts at Mizuho Bank said in a note.
In South Korea, the won KRW=KFTC slid as much as 0.5% before regaining some ground, after its central bank chief warned that a recent surge in COVID-19 infections within the country will likely weaken economic recovery.
Shares in Seoul .KS11, however, closed 1.1% higher, helped by gains in pharmaceutical stocks.
The week is set to be dominated by the U.S. Federal Reserve's annual Jackson Hole conference which begins on Thursday in a virtual form.
Investors have been eagerly awaiting details on possible changes to how the Fed targets inflation.
While global investors cheered the U.S. drug regulator's authorisation of the use of blood plasma from recovered patients as a COVID-19 treatment option, concerns about a continued spike in infections capped gains.
Manila's benchmark stock index .PSI fell more than 1%, while Malaysian shares .KLSE were down 0.5%.
Foreign investors have pulled out $1.62 billion worth of Philippine equities year-to-date, the biggest outflow since at least 11 years for the same period.
The Philippines reported its smallest daily rise in new coronavirus infections in nearly four weeks on Sunday, but the nationwide tally was still the highest in Southeast Asia.
India's blue-chip NSE Nifty 50 index .NSEI was set for a second straight day of gains, even as domestic virus cases crossed 3 million.
Reserve Bank of India (RBI) Governor Shaktikanta Das warned on Friday that India's stock market, which has rebounded significantly from multi-year lows in March, was not in sync with the real economy and would likely see a correction although he could not say when.
** Malaysia's 10-year benchmark yield is up 2.3 basis points at 2.556%, while its 3-year benchmark yield is up 2 basis points at 1.842%
** Top losers on FTSE Bursa Malaysia Kl Index .KLSE include IHH Healthcare Bhd IHHH.KL down 3.23% at 5.4 ringgit; PETRONAS Chemicals Group Bhd PCGB.KL down 2.93% at 5.96 ringgit; Hartalega Holdings Bhd HTHB.KL down 2.37% at 17.32 ringgit
** Top losers on the Singapore STI .STI include: Thai Beverage PCL TBEV.SI down 1.61% at S$0.61; Oversea-Chinese Banking Corp Ltd OCBC.SI down 0.69% at S$8.62; Yangzijiang Shipbuilding Holdings Ltd YAZG.SI down 0.54% at S$2.77
Asia stock indexes and currencies at 0718 GMT
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(Reporting by Shriya Ramakrishnan in Bengaluru; Additional reporting by Gaurav Dogra; Editing by Shailesh Kuber)
((Shriya.Ramakrishnan@thomsonreuters.com; +91 8061822842 ;))
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