BENGALURU (Feb 3): Most Asian currencies weakened against a firmer US dollar on Friday (Feb 3), while regional stock markets were mixed, as investors awaited the key US non-farm payrolls report for further clues about US Federal Reserve (Fed) policy.
The South Korean won and the ringgit led losses in foreign exchange markets. The won fell 0.7% and the ringgit depreciated 0.6%. Indonesia's rupiah, the Singapore dollar and China's yuan eased 0.1% each.
Meanwhile, the Philippine peso reversed early losses to gain 0.2%. India's rupee and Thailand's baht rose 0.1% each.
The European Central bank (ECB) and the Bank of England (BOE) hiked rates by 50 basis points (bps) each on Thursday, with the BOE saying the tide was turning against inflation, and the ECB indicating at least one more hike was on the horizon before re-evaluating its rate hike path.
The decisions followed the Fed's 25 bps raise on Wednesday, after which chair Jerome Powell said that the "disinflationary" process in the world's largest economy had started.
Investors' focus now turns towards the non-farm payrolls report later in the day to gauge the strength of the labour market. Any signs of easing in the strong jobs market could heighten hopes of an imminent pause to the Fed's monetary tightening streak.
"In the very near term, the US labour market data would be the key," said Poon Panichpibool, a markets strategist at Krung Thai Bank.
"The theme for now could be 'good data = the return of a hawkish Fed = bad for the market'. Very upbeat NFPs (non-farm payrolls) or strong rises in wage growth (more than 0.3% month-on-month) could hurt overall market sentiment."
The dollar index, which measures the greenback against a basket of currencies, had risen 0.1% to 101.89 as of 0407 GMT, up from Wednesday's nine-month low of 100.80.
Meanwhile, a Reuters poll found Indonesia's economic growth likely slowed in the fourth quarter as declining commodity and energy prices hit exports, and a widely expected global recession could accelerate the slowdown this year.
Official data for the fourth-quarter gross domestic product is due on Feb 6.
Markets are also eyeing the deepening Adani rout in India. Market losses of the conglomerate swelled above US$100 billion (RM426.95 billion) on Thursday on the back of a US short-seller's reports.
Among regional stock markets, equities in Jakarta advanced 0.8% to hit a more than one-month high. South Korea's benchmark index added 0.5%, while stocks in Singapore rose 0.2%.
Equities in Manila and Bangkok inched 0.1% lower.
Highlights:
- China's services activity in January expanded for the first time in five months as spending and travel got a boost from the lifting of stringent Covid-19 curbs, a private sector survey showed.
- India's National Stock Exchange put trades in some Adani firms under additional watch.
- South Korea's exports and investment would be weak at least through the first half of the year, and the government would provide maximum support to ease the situation, according to the country's finance minister.
