Most emerging Asian currencies eased on Friday, paring some of this week's gains, due to the dollar strengthening on sentiment that US interest rates will rise this year. Malaysia's ringgit fell as hedge funds sold the currency in the non-deliverable forwards markets and traders covered short positions in the dollar ahead of the weekend.
The South Korean won weakened on demand linked to local companies' dividend payments to foreign shareholders. But it shed most of the losses after Moody's Investors Service upgraded the rating outlook for the country to positive.
The dollar stayed around a three-week high against a basket of six major currencies with weakness in the euro and the sterling.
Asian stocks advanced after news that Greece made a 450 million euro ($480.5 million) loan payment to the International Monetary Fund.
Regional currencies failed to track the strong equities with China's inflation data showing that Beijing's stimulus has not significantly eased concerns over deflationary pressure.
China's annual consumer inflation in March stayed flat at 1.4 percent, above a forecast of 1.3 percent. Producer prices fell slightly less than projected, contracting 4.6 percent rather than the forecasted repeat of February's 4.8 percent pace.
"In Asia, it's best to remain long equities and long USD vs Asian currencies while inflation is steady and growth is low but rising," strategists for Scandinavian bank SEB said in a research note.
"Compared to equities, Asian currencies perform better later in the economic cycle when growth and inflation are both rising.
In the current state, it is too early to go long Asian currencies since inflation is still falling."
The bank remained long US dollar against the Singapore dollar, the ringgit and the Thai baht in its Asia currency portfolio, according to the note.
Most emerging Asian currencies were set to report weekly gains as disappointing US jobs data last week added to expectations that the Federal Reserve may delay an interest rate hike and help the region maintain yield attraction.
For the week, the Indonesian rupiah was leading regional appreciation with a 0.8 percent rise against the dollar, according to Thomson Reuters data.
This week, Indonesia's central bank has been spotted intervening to support the ailing unit, which some offshore funds have bought for higher yields.
The ringgit has risen 0.6 percent so far this week as investors scrambled to unwind bearish bets in the currency that has been emerging Asia's worst performer in 2015.
Malaysia's industrial output in February rose 5.2 percent from a year earlier, above expectations, data showed on Friday.
The Taiwan dollar has gained 0.5 percent on demand from exporters for settlements.
India's rupee has advanced 0.2 percent as Moody's revised the country's sovereign rating outlook to positive.
The Philippine peso has seen a similar gain. Among regional currencies that have weakened this week, the biggest loser so far is the Singapore dollar, with a loss of 0.7 percent stemming from belief its central bank may ease monetary policy again next week.
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