India's rupee slipped to its weakest level in three weeks after ratings firm Moody's cut its outlook on the country, while uncertainty around the progress of a prospective Sino-US trade deal punctured broader regional sentiment.

The Indian rupee fell as much as 0.5% to 71.31 against the dollar and is set for its first weekly loss in three after Moody's Investors Service on Thursday cut India's ratings outlook to "negative" from "stable".

The Indian equities markets also lost ground, with the broader NSE Index slipping as much as 0.4%.

Moody's cited increasing risks that growth in Asia's third-largest economy will remain lower than in the past for the downgrade, adding its action partly reflected government and policy ineffectiveness in addressing economic weakness.

"Moody's decision to change its outlook to "negative" from "stable" is a matter of concern," said Rushabh Maru, currency and commodity research analyst at Anand Rathi Financial Services Ltd.

"Focus will now shift to India's macroeconomic data to be released next week and the rupee may trade in the range of 70.80 and 71.60 in the near term."

Underpinning the rupee's slide was a subdued emerging regional market as sentiment turned around on Thursday after an outside adviser to US President Donald Trump said there was no specific agreement for a phased rollback of tariffs.

Sources said the rollback plan faced fierce internal opposition at the White House, and the markets, which had advanced on Thursday's news that China has reached an agreement with the US on tariff cancellation, were pushed to back foot again.

The Thai baht dipped as much as 0.3%, while the Malaysian ringgit and the Indonesian rupiah weakened as much as 0.2% each.

The Chinese yuan was little changed after data showed China's October exports and imports contracted less than expected, a whiff of good news for the region which relies heavily on Chinese demand.

The Taiwanese dollar gained 0.1% ahead of October trade data, scheduled to be released at 0800 GMT, while the Philippine peso was little changed.

The South Korean won outperformed its peers on the day, gaining as much as 0.5%, and is set to put on about 0.8% for the week for a sixth successive weekly gain.

China's trade data showed that its imports from South Korea rose 3.3% on a month-on-month basis.