The rupee strengthened on Friday and is set for its first weekly gain in three after Prime Minister Narendra Modi's ruling coalition scored a massive election win and supported by a decline in the crude oil price.
The weaker oil prices helped currencies of major net importers of the commodity, such as India and Thailand, although moves in other parts of the region's emerging foreign exchange market were limited by concerns about the worsening Sino-US trade war.
In India, PM Modi's thumping win puts his party on course to increase its majority on a mandate of business-friendly policies and reinforces a global trend of right-wing populists sweeping to victory.
The rupee gained as much as 0.4 per cent to touch a session high of 69.74 against the dollar, en route to a weekly gain of about 0.7 per cent.
The currency ended 0.5 per cent lower on Thursday after scaling a session peak of 69.38 when initial leads suggested a facile victory for PM Modi's coalition, in line with most of the exit polls.
Morgan Stanley analysts said foreign flows will likely accelerate after the electoral verdict.
"We expect the Reserve Bank of India to buy forex at every opportunity to recoup forex reserves with most balance of payments indicators slipping towards 2013 levels. High political stability also opens the scope for raising forex reserves via sovereign forex bonds," said Bank of America Merrill Lynch analysts in a note.
Oil declined about 5 per cent as trade tensions dampened the demand outlook, putting the crude benchmarks near their biggest daily drop in six months and on course for their steepest weekly fall in 2019.
The Thai baht appreciated up to 0.4 per cent, its biggest intraday gain in over a week, but is set to decline about 0.6 per cent for the week.
Investors in most other Asian units refrained from making big bets as the global sentiment remained negative with Beijing and Washington trading barbs about the ongoing trade dispute.
US President Donald Trump on Thursday called Huawei Technologies Co Ltd "very dangerous" after effectively banning American firms from doing business with the Chinese telecommunications giant on national security grounds.
Also, no high-level talks have been scheduled between the US and China since the last round of negotiations ended in Washington two weeks ago.
The Chinese yuan, Indonesian rupiah, the Malaysian ringgit, the Singapore dollar, the Taiwan dollar and the Korean won traded in a tight range.
The Taiwan dollar is set to become the worst regional performer during the week, shedding as much as 0.8 per cent.
Data earlier in the week showed Taiwan's export orders contracted for a sixth straight month in April as slowing global tech demand continued to hurt the island's trade-reliant economy.
Taiwan's high-tech factories are major suppliers for global tech heavyweights and the continued weakness in orders suggests global electronic demand will remain soft for some time.
Another unit that came under pressure this week is the ringgit, which is on course for a 0.4 per cent fall for its ninth straight weekly loss.
Malaysia's consumer price index rose 0.2 per cent in April from a year earlier, matching the pace in March, government data showed on Friday.
Earlier this month, Malaysia's central bank cut its key interest rate for the first time since 2016, amid weak inflation and concerns over slowing economic growth.
The Philippine peso is set to put on about 0.5 per cent for the week, while the Korean won is slated to snap a run of four successive weekly losses with a 0.8 per cent gain.
Investors bet most Asian currencies will come under further pressure, a Reuters poll showed, with trade tensions between US and China firmly dominating headlines once again.
With diminishing hopes of a long-awaited trade deal between the countries, the mood across markets have been apprehensive with investors shifting money to safer bets.
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