Most emerging Asian currencies held firm on Friday to cap another week of gains, helped by the prevailing uncertainty on the timing of the US Federal Reserve's rate-tightening cycle. The South Korean won enjoyed the best week in almost one year on exporters' month-end demand for settlements, leading weekly gains among regional peers.
Going the other way, China's yuan eased after the central bank set a weaker guidance, to head for its first weekly loss in a month.
The dollar was on track to end softer for a second straight week against a basket of six major peers, failing to shake of last week's seemingly cautious Fed stance on economic growth.
"We could see some further strength in Asia FX with the dollar's weakness and short-covering," said Saktiandi Supaat, head of FX research for Maybank in Singapore.
The won gained 1.8 percent against the dollar this week, the largest weekly appreciation since April 2014, according to Thomson Reuters data.
Malaysia's ringgit has advanced 1.7 percent in the week as investors cut bearish bets on the second-worst performing Asian currency and oil prices rebounded.
The country is a net oil exporter and the recent slide in crude prices have heightened concerns over their impact on its current and fiscal accounts.
Crude prices jumped on Thursday as air strikes in Yemen by Saudi Arabia and its Gulf Arab allies sparked fears that escalation of the Middle East battle could disrupt world crude supplies.
The Taiwan dollar has risen 0.9 percent so far this week, while the Singapore dollar was up 0.8 percent.
Indonesia's rupiah has appreciated 0.6 percent and Thailand's baht has gained 0.5 percent. Still, analysts doubted the sustainability of gains in emerging Asian currencies given expectations of US rate increases starting later this year.
Investors are now looking to more clues from Fed Chair Janet Yellen's speech on "Monetary Policy" later on Friday before the Federal Reserve Bank of San Francisco Conference.
The latest US data suggested the American economy is in good heart. The number of Americans filing new jobless benefits fell more than expected last week, while activity in US service sector hit a six-month high in March, data showed on Thursday.
If US March jobs data due next week indicates solid growth momentum in the US economy, emerging Asian currencies may slide again, analysts said.
"This correction gives opportunities to buy USD/Asia," said Sean Yokota, head of Asia strategy for Scandinavian bank SEB in Singapore, referring to dollar's slide.
"The strength in USD we have had in the last month was too fast and many people missed it" said Yokota, referring to the period from late February.
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