"Investors are assuming that the worst may be over for the world economy at the start of the second quarter. Heavy bets have been put on the U.S. and China to agree on a trade deal and ease trade tensions," DBS said in a note.

"To further underpin risk appetite, the market is eyeing a retreat in the dollar index from the top of its two-month trading range."

On Thursday, the South Korean Won and the Chinese yuan retreated slightly against the greenback, while the Indian rupee weakened as much as 0.51 percent to 68.768 a dollar.

The Thai baht was about 0.16 percent weaker to the dollar.

Thai consumer confidence declined in March from a month earlier, according to a survey, subjecting the economy to stronger headwinds. The Malaysian ringgit traded flat for the day following a surprise contraction in the country's February exports. However, Malaysia's trade surplus for the month was higher than expected as imports also posted a surprise drop.

Meanwhile, the Indonesian rupiah rose about 0.25 percent to the dollar on Thursday and outpaced other regional peers. The rupiah had been closed for trade on Wednesday.

Taiwan markets are closed for the remainder of the week.

INDIAN RUPEE

The Indian rupee traded lower after three straight sessions of gains.

Mahesh Singhi, founder and Managing Director at Singhi Advisors said that the RBI decision was unlikely to have a major impact on the rupee's spot value, and the market had priced-in much of the near-term volatility expected from from India's upcoming general election.

The Reserve Bank of India is likely to cut by 25 basis points, though some analysts believe the country's weakening economic growth and subdued inflation outlook warrant a larger reduction. Singhi also said that a 25-basis-point cut was likely.

The following table shows rates for Asian currencies against the dollar on Thursday.