Most Asian currencies were subdued on Friday, with the dollar firm after the European Central Bank stuck to its planned timetable to exit its accommodative monetary policy and investors awaited US economic growth data.
The index measuring the dollar's strength against a basket of six major currencies, stood little changed at 94.725 by 0600 GMT. It had risen 0.4 percent overnight to pull away from a two-week low of 94.084. "The fundamentals continue to favour the USD but Trump has been jawboning Fed hikes when DXY threatens to break above 95," DBS strategists said.
"A strong headline print would limit Trump's ability to jawbone Fed hikes." Investors remained anxious ahead of a potentially strong US gross domestic product reading, due later on Friday while the yield on 10-year US Treasury notes hovering near six-week highs dampened sentiment in the region.
"The market is anchored on the rumour that Trump was telling his mates the (GDP) print would be 4.8 percent. There is room for disappointment, I think, in this outcome tonight," Greg McKenna, chief market strategist at CFD and FX provider AxiTrader wrote in a note. The Indian rupee and the Philippine peso strengthened 0.2 percent, the only regional currencies to gain that much. The Reserve Bank of India's next policy review is on Aug. 1. Last month the RBI raised its benchmark rate for the first time since 2014, in an attempt to stem a slide in the rupee, which has weakened about 6.9 percent so far this year.
The bank also revised up its inflation projection for October-March to 4.7 pct from 4.4 pct earlier. The IMF said on Wednesday it now expects the Philippines' current account deficit to rise to 1.5 percent of GDP by end-2018, compared with an earlier forecast of 0.3 percent, due mainly to increased imports of capital goods and raw materials.
The Indonesian rupiah, Singapore dollar, South Korean won and the Taiwan dollar traded effectively flat. The Chinese yuan, which has been battered by escalating trade tensions, slipped 0.3 percent. Thai markets were closed on Friday for a local holiday. China's yuan weakened further on Friday to slip 4.33 percent so far this year.
Investors stacked bearish bets on the Chinese yuan to the highest on record, a Reuters poll showed. Earlier this week China's cabinet moved towards a more 'vigorous' fiscal policy aimed at addressing potential trade shocks and liquidity concerns which have cropped up as the country looks to ease fears of a debt bubble.