Most Asian currencies recovered on Thursday as the dollar dipped and the euro gained after news that Italy's political turmoil may be easing with the resumption of coalition talks between anti-establishment parties. Global sentiment was battered on Wednesday when Italy seemed to be heading for a repeat election after the inconclusive vote in March.
The euro, which fell to 10-month lows on Wednesday, gained on Thursday after coalition talks reduced the odds of a second election this year. The dollar index was 0.1 percent lower at 0520 GMT.
Among regional currencies, the South Korean won rose 0.5 percent with April industrial output and retail sales data being more or less positive, while the Thai baht strengthened after two days of losses. The Indian rupee, however, slipped slightly ahead of fourth-quarter economic growth data to be out later in the day.
A Reuters poll suggested that India likely retained its position as the world's fastest-growing economy with the growth rate expected to come in at 7.3 percent.
Mizuho Bank said despite expectations of a rise in gross domestic product, "heady oil prices may be dulling economic momentum, driving up business costs, denting discretionary consumption".
It noted that faster inflation and a wider current account deficit could undermine foreign investor confidence.
The Chinese yuan rose on Thursday after four straight sessions of losses.
A survey found China's May manufacturing sector grew at its fastest pace in eight months, smashing analysts' expectations of a dip.
However, the sustainability of this growth remains under review as Sino-US trade tensions continue to simmer.
The yuan dipped on Wednesday after White House said it would press ahead with tariffs on $50 billion worth of imports from China if Beijing did not address the alleged theft of American intellectual property.
The rupiah climbed the most in the region after the central bank raised the benchmark interest rate for the a second time in two weeks and signalled more could be in the offing.
Bank Indonesia raised interest rates by 25 basis points to 4.75 percent in an out-of-cycle meeting on Wednesday after hiking it earlier this month to help the depreciating rupiah and curb capital outflows. The rupiah was then languishing at 2-1/2 year lows.
"This move was welcomed by investors as the new governor tries to instil confidence in rupiah assets," DBS Group Research said in a note.
"Outflows from foreign investors amid lacklustre emerging market sentiment have pushed local government bond yields up sharply over the past few months while rupiah weakness has also come to the fore.
"That said, we turned positive on rupiah assets last Friday noting that there is value at current levels." The rupiah reached 13,880 on Thursday, its highest level since April 30, and is set to log a monthly gain after three declining months.