Sino-US trade deal hopes lift Asian currencies

Most Asian currencies firmed on Friday after risk sentiment was buoyed by fresh optimism that a deal to end a 16-month trade dispute between United States and China will materialize soon.

White House economic advisor Larry Kudlow on Thursday said the world's top economies were getting close to an agreement, citing what he called very constructive talks with Beijing.

"Like any good showman, Kudlow is keeping markets warm," Vishnu Varathan, senior economist at Mizuho Bank, said in a note, adding that his comment on the deal "coming down to the short strokes" must be tantalizing as it suggests that the finish line is within sight.

South Korea's won lead gains among its Asian peers, strengthening as much as 0.4%. The unit was on track to decline 0.8% for the week, snapping six straight weeks of gains.

The South Korean economy is relatively more sensitive to developments in the trade war, given its reliance on tech exports.

The yuan firmed up to 0.3% against the dollar, but was poised to end five consecutive weeks of gains.

The People's Bank of China unexpectedly extended 200 billion yuan through its medium-term lending facility on Friday, the second time it has done so this month, while keeping the lending rate unchanged.

The liquidity injection comes a day after the country posted

a range of weak economic data, including faltering factory output and investment growth.

The Indian rupee gained 0.4% and the Philippine peso added 0.3%.

Gains in the peso were supported by the country's central bank holding rates unchanged at 4.00% on Thursday, after surprisingly strong economic growth in the third quarter.

Malaysia's ringgit was marginally stronger, despite data showing the economy grew 4.4% in the third quarter, its slowest pace in a year.

The central bank, however, said growth will remain positive and maintained its 2019 outlook.

The Indonesian rupiah was slightly firmer as government data showed the country swing to a trade surplus in October due to slower-than-expected drop in exports.

However, concerns about a fall in both exports and imports weighed on growth outlook.

"For the time being, the rupiah remains well-supported by financial market flows," ING said in a note.

"But should concern about the current account return to the spotlight, the IDR may be pressured once more with Bank Indonesia likely to revisit its current "accommodative" stance".