Most Asian currencies slip

Most Asian currencies dipped on Friday after China said it plans to impose new security legislation on Hong Kong, drawing threats from the United States and prompting worries that already strained relations could deteriorate further.

Details on the legislation are set to be given at the Chinese parliament's ongoing annual session and has already drawn a warning from US President Donald Trump that Washington would react "very strongly" against the attempt to gain more control over the former British colony.

US senators also said they would introduce legislation to sanction Chinese officials for violating Hong Kong's independence.

Relations were already on a weak footing, with Washington accusing Beijing of mishandling the virus outbreak and the recent passing of US legislation that could bar some Chinese companies from listing on US exchanges.

The distraction of China's parliament meeting may see a delayed retaliation from China, IG market strategist Jingyi Pan said in a note.

"... the recent moves including the bill passed on Chinese firms listing rules could altogether feed into further aggravations down the road, keeping challenging foreign relations on the pedestal."

Holding out for more support measures from the parliamentary meet, the Chinese yuan held steady at 7.120, while the dollar found firm footing owing to the spike in uncertainty.

The trade-sensitive South Korean won fell most in the region, weakening 0.6%. Singapore, a bellwether of global trade, saw its currency ease 0.3% while the Taiwanese dollar was also marginally weaker.

The Philippine peso and Malaysian ringgit fell by 0.3% each. Indonesian markets remained shut on account of a local holiday.

The Indian rupee opened marginally weaker, but extended losses to stand at 75.860 against the dollar after the country's central bank unexpectedly slashed its key policy rate for a second time this year.

Reserve Bank of India Governor Shaktikanta Das said the central bank's Monetary Policy Committee had voted unanimously for the rate reduction, adding that global financial markets were disconnected from the real economy.

Das added domestic economic activity had taken a severe hit from the country's two-month lockdown starting in late March, with inflation outlook now becoming complicated and GDP growth for 2021 likely to remain in negative territory.