The first round of the tight French presidential election this weekend could influence movements in euro/dollar, said IG Chief Market Strategist Christ Weston in a Thursday morning note.
Most Asian indexes were cautiously higher on Thursday, following key earnings on Wall Street and as oil prices came off two-week lows set earlier in the session.
Japan's benchmark Nikkei 225 index climbed 0.22 percent and the ASX 200 was up by 0.29. The Kospi was higher by 0.16 percent.
But markets in greater China were narrowly mixed. The Shanghai Composite eased 0.18 percent lower while the Shenzhen Composite traded nearly flat. The Hang Seng Index bucked the trend and rose 0.22 percent.
"Weak overnight share trading and falls in crude oil and gold should see Asia Pacific shares under further pressure today. However, local investors are leading the current round of global selling and may confound international leads," CMC Markets' Chief Market Strategist Michael McCarthy said in a note.
Oil prices recouped some losses after falling to a two-week low, down nearly 4 percent, following an unexpected build in US gasoline inventories and an increase in US crude production. Brent crude was up by 0.62 percent to trade at USD 53.26 a barrel while US crude rose 0.61 percent at USD 50.75.
Investors are also expected to eye politics in Europe as tensions on the Korean peninsula appear to ebb, following news that a US aircraft carrier group had not actually been headed to seas near the Korean Peninsula.
The first round of the tight French presidential election this weekend could influence movements in euro/dollar, said IG Chief Market Strategist Christ Weston in a Thursday morning note. Centrist Emmanuel Macron and far-right candidate Marine Le Pen, who advocates leaving the euro zone, are most likely to go through to the second round of the election, he added.
"(I)t seems unlikely euro/dollar will break the USD 1.05 to USD 1.085 range on this outcome. I would however favor euro appreciation here and a brief rally in the CAC 40 cash, given the polls have consistently shown an easy win for Macron," Weston said. Euro/dollar last traded at USD 1.0713.
Meanwhile, the dollar rose from around three-week lows to trade at 99.796 against a basket of rivals at 9:20 am HK/SIN. The greenback was also slightly stronger against the yen, trading higher at 108.86 compared to the 108.4 handle seen yesterday.
Sterling gave up some gains after rising to a six-and-a-half month high following the announcement of a snap election by Prime Minister Theresa May on Tuesday. Cable traded at USD 1.278, just off the USD 1.28 handle seen Wednesday.
Commenting on sterling, Port Shelter Investment Management Chief Executive Richard Harris told CNBC that the currency had been "due for a bounce" but is unlikely to strengthen further. "I don't really see it moving much more from here. There's still too much uncertainty out there," he added.
In corporate news, Rio Tinto reported that iron ore production fell 3 percent on year but did not change its full-year guidance. Rio Tinto shares jumped 1 percent in early trade.
On the economic front, Japan reported that March exports rose 12 percent on year, against a 6.7 percent increase projected. This is the fourth consecutive month of gains for Japanese exports, Reuters said.
Japanese Finance Minister Taro Aso said on Wednesday there would be "various problems" if the Bank of Japan resorted to helicopter money as this would undermine its independence.
The Indonesian central bank is expected to announce its rate decision at 5:00 pm. It is widely expected to keep rates on hold.
Also in Indonesia, incumbent governor Basuki Tjahaja Purnama, commonly referred to as Ahok, ceded ground in the Jakarta gubernatorial election to challenger Anies Baswedan, a former education minister.
Stateside, stocks closed mostly lower on the back of a mixed earnings picture and lower oil prices, with the Dow Jones industrial average down 0.58 percent or 118.79 points after IBM announced mixed Q1 earnings, to finish at 20,404.49.In its Beige Book report released on Wednesday, the US Federal Reserve indicated that the labor market was tightening but that inflationary pressures remained modest.