On Tuesday, the Malaysian ringgit and Thai baht surged to multi-year highs against a weakening US dollar, leading gains among emerging Asian currencies, while financial stocks propelled Singapore's benchmark index to a historic peak.

The Thai baht briefly broke through the 31.100 level, climbing to 31.055—its strongest position since early June 2021. The currency's rally has been fueled by soaring gold prices, though this poses a challenge to Thailand's economic growth as a stronger baht could dampen export and tourism revenues. Year-to-date, the baht has gained over 10%, emerging as the region's top-performing currency.

"Correlation between the baht and gold prices has been notably high this year, reflected in their synchronized direction and comparable magnitude of movement," said Ratasak Piriyanont, Senior Vice President of Investment Strategy at Kasikorn Securities in Bangkok. Gold, benefiting from a softer dollar and expectations of US rate cuts, has surged approximately 70% this year, repeatedly setting record highs.

The Malaysian ringgit, Asia's second-best performer this year with nearly 10% appreciation, edged higher on Tuesday to reach its highest level since early March 2021.

Singapore's stock market scaled a fresh peak of 4,625.48 points, marking the third record high for the benchmark index this month. The FTSE Straits Times Index has risen 22% this year, on track for a second consecutive annual gain, driven by heavyweight banking stocks and defense firm ST Engineering, which has skyrocketed nearly 80%.