White House economic adviser Larry Kudlow, a top aide to U.S. President Donald Trump, on Tuesday denied reports that a preliminary trade meeting between U.S. and Chinese officials was cancelled. The report had briefly shaken up risky assets overnight.

The yuan rebounded 0.4 percent for its best single-session gain since Jan. 15.

Currency markets, particularly those of emerging economies, have recently been weighed down by the trade dispute between the world's top two economies, the Brexit dilemma and on signs of a broadening global economic slowdown.

Oil prices dropped about 2 percent overnight on concerns slower world growth could dent fuel demand with below-expected production cuts by Russia adding to the downside pressure.

Oil managed to stabilise on Wednesday on hopes Chinese authorities will ramp up stimulus to juice economic growth. That view was supported by Chinese finance ministry officials' signal of higher government spending this year.

The Indian rupee firmed as much as 0.4 percent to 71.15 against the dollar, while the Indonesian rupiah added 0.3 percent.

Both India and Indonesia are major net importers of oil in the region and any swing in the prices of the commodity would have a major impact on the countries' fiscal status.

"Besides the optimism in trade talks, the liquidity injection from China's central bank through the targeted medium-term lending facility (TMLF) tool comes into the picture and has lifted the sentiment in the market. But the week's range so far has been muted," said Christopher Wong, senior forex strategist at Maybank.

The South Korean won rose 0.4 percent, in tandem with the country's KOSPI stock index <.KS11>, helped by the optimism over U.S.-China talks.

The Philippine peso and the Malaysian ringgit edged down, ahead of the respective country's GDP and inflation data release on Thursday.

A Reuters poll forecast Philippine economic growth to have sped up 6.2 percent from a year earlier, marginally up from a three year low recorded in July-September.

Malaysia's consumer price index (CPI) was expected to rise 0.4 percent in December from a year earlier, a Reuters poll showed, slightly faster than the previous month.

CHINESE YUAN

China's yuan rebounded against the dollar, recovering all of its losses in the previous session, supported by a relief bounce in offshore yuan overnight and as companies took profits after a dip earlier this week.

Prior to the market opening on Wednesday, the People's Bank of China set the midpoint rate lower for the fourth straight session at 6.7969 per dollar, 115 pips or 0.17 percent weaker than the previous fix of 6.7854.

The following table shows rates for Asian currencies against the dollar at 0610 GMT.

(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Shri Navaratnam)

By Aby Jose Koilparambil