Asian currencies held mostly steady in tight range trade against a firmer dollar on Friday, while the Chinese yuan snapped four straight sessions of gains as tight offshore liquidity eased. Investors refrained from making major trades ahead of non-farm payrolls data from the United States due later on Friday, which could bolster the odds for an interest rate rise in June.
A solid number will support the outlook for another rate hike by the year-end, likely in September. “The U.S. wage data is partially the reason why markets have been subdued in Asia this morning, as it could cement a rate hike in June and support the dollar, which would cause Asian currencies to retreat,” said Khoon Goh, head of Asia research at Australia and New Zealand Banking Group in Singapore.
“There isn’t much of a lead for Asian currencies today.” A Reuters poll showed that the United States added about 185,000 jobs in May. The yuan edged down about 0.1 percent to 6.8142 against the dollar, but hovered around the near seven-month highs it hit on Thursday. The currency stands to gain about 0.57 percent this week, although it traded only for three days.
“The yuan’s fixing came in broadly as expected, so there weren’t any strong signals from Chinese authorities to push the yuan any higher,” Goh said. “We’re seeing a bit of unwinding in the strength displayed so far.” The South Korean won rose about 0.12 percent, while the Taiwan dollar inched 0.03 percent higher.
South Korean and Taiwanese stocks rose on Friday in line with broader Asia as equities tracked a strong finish on Wall Street on Thursday. “U.S. equities had a good session overnight, so that might be translated into equity driven markets like the Korean won and the Taiwan dollar,” Goh said. U.S. stocks advanced on Thursday after a batch of economic data suggested the economy was picking up speed.
The Malaysian ringgit rose about 0.18 percent. Foreign portfolio investors were reported saying they would come back to Malaysia’s markets, six months after many of them revolted against the central bank’s crackdown on the offshore ringgit trading market. The ringgit stands to lose about 0.27 percent this week after gaining for the previous two weeks consecutively.
RUPIAH AND RUPEE
The Indonesia rupiah rose about 0.13 percent on Friday, while the Indian rupee was 0.1 percent higher. Indonesia’s annual inflation rate climbed again in May to reach the highest in 14 months, data from the statistics bureau showed on Friday, but the increase was slightly less than expected.
India’s Nifty 50 Index rose as much as 0.6 percent on Friday to a record high, also clocking its biggest intraday percentage gain in a week. The country’s benchmark BSE index was also at a record high.