The Thai baht made gains, helped by emerging clarity about the winner of the Southeast Asian nation's first election since the 2014 military coup. While Washington's threatened tariff increase on $200 billion worth of Chinese goods took effect, investors took some comfort from the fact that Sino-U.S. negotiations this week had not fallen apart. However, investor sentiment remains fragile.
"The only good news here is that China stays for talks on Friday. The fact talks were only 90 minutes suggest there was little movement on both sides. The talks Friday will probably focus on how to get talks back on track," Allan von Mehren, chief analyst at Danske Bank, wrote in a research note.
China's yuan strengthened 0.3% against the greenback, despite China's central bank setting the midpoint of the currency's daily trading band at its weakest level in 3-1/2 months before the market open.
U.S. and Chinese officials will return to the negotiating table later on Friday.
South Korea's won snapped two sessions of losses to strengthen 0.2% on the day, having received some support from central bank intervention, which was suspected of selling dollars to curb the unit's fall, according to traders.
South Korea's financial minister said it will respond to volatility stemming from U.S.-China trade talks and monitor currency movement around the clock.
A Reuters poll showed that short positions on the won, the worst performing currency in the region this year, were at their highest since January 2016, as a slew of weak economic data has heavily weighed on the unit.Meanwhile, the Philippine peso strengthened 0.2% on the day.
Bangko Sentral ng Pilipinas, cut its benchmark interest rate on Thursday for the first time since October 2012, on expectations inflation will ease after the economy grew at its slowest pace in four years in the first quarter.
The central bank maintained banks' reserve requirement ratio (RRR) at 18 percent, but Governor Benjamin Diokno said it would be discussed next week, without elaborating. Bucking the regional trend, the Indonesian rupiah declined for a third straight session and was on track to record a weekly loss of 0.7%.
Indonesia's current account deficit narrowed in the first quarter to the smallest in a year, helping the country to post a balance of payments surplus, but some economists say this would not trigger an interest rate cut by the central bank.
THAI BAHT
The Thai baht strengthened 0.4% on the day to its best level against the greenback since March 26.
"The baht is being supported by clarity on the election outcome even though concerns remain in the medium term, as the new government is made of many small parties," Christopher Wong, a senior FX Strategist at Maybank said.
Long-delayed results of Thailand's first election since a 2014 military coup released on Wednesday produced no clear winner but gave a pro-army party a clear advantage in its bid to install the current junta leader as an elected prime minister.