Most Asian currencies strengthened on Friday but moved in a tight range, as hopes of the United States and China signing an interim trade deal early next year boosted investor sentiment in holiday thinned trade. China said on Thursday that Beijing and Washington were in close contact on the signing of the "Phase 1" trade deal, which came after US President Donald Trump's indication of a ceremony for the signing.

Firming the most in the region, the Taiwan dollar strengthened for a fourth straight session propped up by portfolio inflows.

The sentiment was driven partly by growth prospects of the economy and potential demand for 5G equipments, said Gao Qi, forex strategist (EM Asia) at Scotiabank.

Last month, Taiwan had raised its growth outlook and said that recovering demand for electronics due to new technologies, including fifth-generation telecommunications (5G), would boost Taiwan's exports in 2020.

Meanwhile, the Philippine peso lost most of its gains in the previous session, weakening 0.2%.

Trade reliant South Korea's currency firmed about 0.2% but was set to post its third consecutive weekly gain.

The South Korean won is the worst performing currency so far this year among its Asian peers, wounded by a drawn out Sino-US trade war.

The Thai baht, on the other hand, has strengthened nearly 7.4% during the same period and firmed about 0.1% on the day.

While the trade reliant South Korean economy fumbled amid the volatile trade tensions between the world's two biggest economies, the Thai baht benefited from safe-haven flows into the attractive low but stable yielding Thai assets.

The fallout from the trade war has however weighed on the growth of both of these Asian economies.