SINGAPORE -- Asian currencies managed light gains on Monday on the back of a rally in equity markets, with the ringgit edging near a 10-year high, although anxiety about a possible US recession made investors wary of taking on risk.

The US dollar held steady above its record low struck last week against the euro after mixed data on Friday. Figures showed a surprise rebound in US manufacturing activity in January alongside data showing the US economy suffered its first labor market contraction in 4-? years in the same month.

But US stocks rose sharply on Friday, helping MSCI's measure of Asia Pacific stocks excluding Japan post a 2.4 percent jump on Monday.

Currencies such as the Korean won and Malaysian ringgit tracked gains on their stock exchanges, gaining more than 0.2 percent each. Analysts said sentiment had improved after the Federal Reserve's two hefty rate cuts in January designed to help the flagging economy.

"Given the recent 125 bps (basis points) of Fed cuts and the light US data this week, we would expect US equities to maintain a positive momentum thus helping Asian currencies for now," a UBS note said.

"But with continued lack of clarity in the global markets, a more sustained recovery in risk trades would need a more positive cyclical recovery in sentiment," it said.

The Taiwan dollar took the lead in Asia, gaining nearly 0.4 percent on expectations of inflows due to exporters converting their US dollar earnings ahead of the Lunar New Year holidays.

The central bank intervened to limit gains, capping the currency at a high of 32.04 against the dollar.

South Korea, Taiwan and China will be closed from Wednesday to the end of the week, while several other countries are also shut on Thursday and Friday.

The Malaysian ringgit rose 0.2 percent to 3.229 per dollar, falling short of 10-year highs struck last week after gains of 1.8 percent in equities on the Kuala Lumpur Stock Exchange.

"Given the Dow Jones Index is positive, KLSE should follow, thus allowing us to keep the target of 3.2230 in sight for this week," a trader in Kuala Lumpur said.

The Korean won hit a 3-?-week high at 941 per dollar as the local stock exchange rose by 3.0 percent, due also to expectations of increased demand for the won from exporters ahead of the Chinese New Year holidays.

The Indonesian rupiah fell 0.4 percent to hit a low of 9227 per dollar and traders said this was due to offshore demand for dollars, and despite a government report last Friday, which showed an pick up in inflation.

"The trend for dollar/rupiah is still bearish. It's just that offshore players want a higher fixing rate, so there's been some dollar buying this morning," a trader in Jakarta said.

Analysts at JPMorgan said the rising inflation placed the central bank in a difficult position and could weigh on their outlook for two 25 basis points rate cuts in Indonesia's policy rate, which is now at 8.0 percent.