Most Asian currencies ended the week on a weaker note on Friday as the U.S dollar firmed and uncertainty over US-China trade negotiations kept many investors on the sidelines. The dollar was helped by a spike in Treasury yields after data showed the US economy grew at an 2.6 percent annualised rate in the fourth quarter, above economists' forecasts.
On trade, sentiment was dampened after US President Donald Trump warned that he could walk away from a deal if it was not good enough, days after extending the deadline to raise tariffs on Chinese goods to allow more time for talks. The Chinese yuan edged lower on Friday and was set to decline for a second straight week.
Investors also fled riskier Asian assets as a contraction in China's factory activity in February sparked fears its economy may be at risk of a sharper slowdown. Leading declines in the region, The Thai baht retreated the dollar on Friday and was on track to lose about 1 percent this week.
However, bullish sentiment for the baht remained the strongest in the region with long bets at their highest in 13 months, as a Reuters poll showed investors remained optimistic about Thailand's strong economic fundamentals. The Indonesian rupiah slipped 0.4 percent against the greenback and was on track for weekly losses.
Elsewhere, the Malaysian ringgit declined marginally. Malaysia's central bank is expected to leave its benchmark overnight policy rate unchanged at a policy review on Tuesday as it keeps an eye on global growth and trade, according to a Reuters poll. Bucking the regional trend, the peso firmed and was expected to climb 0.5 percent against the dollar this week, its second straight week of gains.
The South Korean and Taiwan financial markets were closed for holidays. The rupee dipped slightly after government data on Thursday showed Indian economic growth in the final quarter of 2018 slipped to its slowest pace in five quarters.
The lost of economic momentum may be bad news for Prime Minister Narendra Modi before the national elections in May, and could also prompt the Reserve Bank of India to cut rates at its April meeting. However, losses in the currency were capped by some relief in border tensions with neighbour Pakistan after the latter said on Thursday it would return a captured Indian pilot.
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