Asian FX loses steam ahead of U.S. jobs data; Philippine peso firms

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Most emerging Asian currencies pared

earlier gains on Friday, as the U.S. dollar strengthened ahead

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of a crucial jobs data, overshadowing a boost from China’s

recent reopening plans and policy support measures for the

country’s property sector.

The Philippine peso, however, hit a one-week high, up

0.3% against the dollar, a day after the country’s central bank

pledged further action to tackle inflation, which hit a 14-year

high in December.

Aiding the currency’s moves was a “decline in global crude

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oil prices during the week that could ease inflationary

pressures and help narrow the country’s trade deficit/net

imports,” said Michael L. Ricafort, chief economist at Rizal

Commercial Banking Corp.

The dollar held near an almost one-month high, as

market bets on further rate hikes strengthened after data on

Thursday pointed to a still-tight U.S. labor market.

“Coming ahead of the noteworthy non-farm payrolls report, we

see scope for some near-term dollar strength as a result,” MUFG

Bank analyst Jeff Ng said.

U.S. jobs data due later in the day could provide clues on

how aggressive the Federal Reserve will be in tightening policy

this year.

The greenback strength led most Asian currencies to pare

earlier gains.

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The Thai baht traded flat, but it was set to post

the biggest weekly gain among regional peers in the first week

of 2023, buoyed by hopes of increased tourism from China as it

gradually reopens its borders.

Chinese investors are doubling down on economic recovery

bets, with a flurry of new fund launches this week riding on

optimism about an end to COVID restrictions, though money

managers warn the next wave of market gains will be less

broad-based.

The yuan rose 0.3%.

The Singaporean dollar and the South Korean won

also pared gains to trade flat.

The Indonesian rupiah and the Malaysian ringgit

fell 0.2% each, while the Japanese yen slipped

0.6%.

The yen has weakened more than 2% against the dollar during

the week. Earlier in the week, Prime Minister Fumio Kishida

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reiterated his resolve to maintain ultra-loose monetary policy

to sustainably achieve 2% inflation.

Meanwhile, the dollar’s vice grip on FX markets will loosen

a bit this year, according to a Reuters poll, where analysts

expect most currencies to post marginal gains against the

greenback over the coming 12 months.

Among Asian equities, Philippine stocks fell 0.8%,

while those in Malaysia and India dipped 0.4%

each.

Indonesian stocks rose 0.7%, but they were set to

drop 2.2% for the week, the biggest drop among regional equities

on news of China’s partial easing of its Australian coal imports

ban.

Thai stocks gained 0.7%, while Seoul stocks

climbed 1.2% on chipmakers’ boost.

HIGHLIGHTS:

** Taming inflation is the top priority for South Asian

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countries as risks to growth and investment outlook could rise

if price pressures persist at high levels, Reserve Bank of India

(RBI) governor Shaktikanta Das said

** China Energy Investment Corp has placed an order to

import Australian coal, three sources familiar with the matter

said, in one of the first deals since Beijing eased an

unofficial ban imposed on coal imports from Australia in 2020

** Indonesia’s foreign exchange reserves rose to $137.2

billion at the end of December, the highest in nine months, the

central bank said

Asia stock indexes and

currencies at 0840 GMT

COUNTRY FX RIC FX FX INDE STOCK STOCK

DAILY YTD % X S S YTD

% DAILY %

%

Japan -0.57 -2.27 <.n2>

China EC>

India -0.08 +0.12 <.ns ei>

Indones -0.19 -0.45 <.jk ia se>

Malaysi -0.23 +0.11 <.kl a se>

Philipp +0.34 +0.07 <.ps ines i>

S.Korea 11>

Singapo +0.02 -0.38 <.st re i>

Taiwan -0.08 -0.09 <.tw ii>

Thailan -0.04 +1.63 <.se d ti>

(Reporting by Savyata Mishra in Bengaluru; Editing by Kim

Coghill and Rashmi Aich)