EMERGING MARKETS-Asian FX loses steam ahead of U.S. jobs data; Philippine peso firms
By Savyata Mishra
Jan 6 (Reuters) - Most emerging Asian currencies pared earlier gains on Friday, as the U.S. dollar strengthened ahead 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 PHP=, 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 oil prices during the week that could ease inflationary pressures and help the country's trade deficit/ imports," said Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp.
The dollar =USD held an almost one-month high, as market bets on further rate hikes strengthened after data on Thursday pointed to a still-tight U.S. labour market.
"Coming ahead of the -farm payrolls report, we see scope for some -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.
The Thai baht THB=TH 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 fund launches this week riding on optimism about an end to COVID restrictions, though money managers warn the wave of market gains will be less broad-based.
The yuan CNY=CFXS rose 0.3%.
The Singaporean dollar SGD= and the South Korean won KRW=KFTC also pared gains to trade flat.
The Indonesian rupiah IDR= and the Malaysian ringgit MYR= fell 0.2% each, while the Japanese yen JPY= slipped 0.6%.
The yen has weakened more than 2% against the dollar during the week. Earlier in the week, Prime Minister Fumio Kishida 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 .PSI fell 0.8%, while those in Malaysia .KLSE and India .NSEI dipped 0.4% each.
Indonesian stocks .JKSE rose 0.7%, but they were set to drop 2.2% for the week, the biggest drop among regional equities on of China's partial easing of its Australian coal imports ban.
Thai stocks .SETI gained 0.7%, while Seoul stocks .KS11 climbed 1.2% on chipmakers' boost.
HIGHLIGHTS:
** Taming inflation is the top priority for South Asian 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 months, the central bank said
Asia stock indexes and currencies at 0840 GMT | ||||||
COUNTRY | FX RIC | FX DAILY % | FX YTD % | INDEX | STOCKS DAILY % | STOCKS YTD % |
Japan | JPY= | -0.57 | -2.27 | .N225 | 0.53 | -0.44 |
China | CNY=CFXS | +0.38 | +0.64 | .SSEC | 0.11 | 2.25 |
India | INR=IN | -0.08 | +0.12 | .NSEI | -0.39 | -1.02 |
Indonesia | IDR= | -0.19 | -0.45 | .JKSE | 0.73 | -2.17 |
Malaysia | MYR= | -0.23 | +0.11 | .KLSE | -0.35 | -1.32 |
Philippines | PHP= | +0.34 | +0.07 | .PSI | -0.83 | 2.11 |
S.Korea | KRW=KFTC | +0.01 | -0.38 | .KS11 | 1.01 | 2.29 |
Singapore | SGD= | +0.02 | -0.38 | .STI | -0.57 | 0.69 |
Taiwan | TWD=TP | -0.08 | -0.09 | .TWII | 0.51 | 1.67 |
Thailand | THB=TH | -0.04 | +1.63 | .SETI | 0.68 | 0.39 |
(Reporting by Savyata Mishra in Bengaluru; Editing by Kim Coghill and Rashmi Aich)