On Monday, Asian currencies mostly down as the U.S jobs data, which showed wages increased at their quickest pace in more than eight and a half years, bolstered U.S dollar. The data also propelled prospects of rising inflation.
The U.S. dollar index against a traded basket of six major currencies was a bit changed at 89.127 after adding 0.6 percent on Friday.
The jobs report backed the dollar, which had fallen to a three-year low of 88.438 late in January because of some factors including perceptions of lowering yield advantage.
“If we start to see positive inflation surprises on a sustained basis, then I think it will be quite damaging for Asian currencies,” a forex strategist at Bank of Singapore said.
“If the wage pressures that we saw last Friday was a one-off for whatever reason and we see a much more gradual buildup in wage pressures and therefore a gradual buildup in inflation then… it could be more benign for Asian currencies.
San Francisco Fed President, John Williams, said on Friday that the rapid growth of the economy could mean it increases rates three or four times this year. Greater U.S. rates minimize the relative attractiveness of assets denominated in developing market currencies.
The U.S. data sent bond yields surging which resulted in an Asian stock sell-off. Japan’s Nikkei fell 2.6 percent, while Australia’s main index lost 1.6 percent and Chinese blue chips dipped 0.7 percent.
The Thai Baht slid 0.41 percent. Likewise, the Taiwan dollar fell 0.16 percent and the Malaysian ringgit by 0.22 percent.
However, the Singapore dollar rose 0.17 percent, while India’s rupee about 0.02 percent. India’s central bank is expected to set rates including the repurchase rate and the cash reserve ratio on Wednesday.
The Chinese yuan surged 0.05 percent higher in spite of the People’s Bank of China’s move to set the midpoint fixing rate at 6.3019 against the dollar, lower than the former fix of 6.2885 on Friday.
South Korea’s won was seen 0.92 weaker against the U.S. dollar after hitting its lowest level since the middle of December.
Indonesia’s rupiah dropped 0.35 percent, disregarding robust economic growth numbers. The statistics bureau said the country’s economy surged as its quickest move in four years in October to December.
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