Most emerging Asian currencies gained on Friday as the greenback eased on softer-than-expected US inflation data, allaying worries that the Federal Reserve might aggressively hike interest rates this year. The dollar hovered below a 4-1/2 year high against a basket of currencies at 92.706 at 0529 GMT.
US consumer price data suggested that inflation was increasing at a moderate pace. However, with rising oil prices and President Donald Trump's decision to exit the Iranian nuclear deal, price pressure is expected to accelerate in the coming months.
The Fed's next meeting is in mid-June. Stephen Innes, head of Asia-Pacific trading at Oanda, said in a note that US retail sales on May 12 will "provide the next US dollar guidepost".
The Indonesian rupiah, which this week reached 2-1/2 year lows, strengthened 0.4 percent to 14,020 a dollar, following increasingly hawkish comments from Bank Indonesia to support the currency. The comments suggested to some the central bank will hike rates at a meeting that ends on May 17. The rupiah looked set to post a fourth weekly loss.
Financial markets in Malaysia remained closed for a second day following its historic election result that brought Mahathir Mohamad back as prime minister. In offshore trading, ringgit one-month and three-month non-deliverable forwards pared some of Thursday's 4 percent losses. The Singapore dollar showed little movement from Thursday's close of 1.3372 per dollar, as traders weighed political developments across the border in Malaysia.
The peso slipped 0.3 percent to 52.066 a dollar following gains on Thursday, when the central bank raised interest rates for the first time in three years. "The rate hike was highly anticipated already and when the peso dropped below 52 a dollar, that was the effect of the rate hike," said Manny Cruz, analyst with Asiasec Equities Inc.
India's rupee strengthened 0.2 percent, ahead of Saturday's election in the state of Karnataka and April industrial output data later in the day. The currency is on track to log a fifth straight week of losses.
Karnataka and its capital city, Bangalore, dubbed India's Silicon Valley, is the first major state election this year which may give the current government a foothold in the south of the country ahead of next year's general election.
"Markets are coming around the view that the 2019 general elections might see the ruling coalition, National Democratic Alliance, stay in the lead but fall short of an absolute majority in the lower house," said DBS Bank said a note.
Considering elections, "Reserve Bank of India may also have to act proactively to temper bond and forex market volatility through various interventions, beyond regular forex intervention."