Asian currencies rose on Friday as hopes for the passage of a US stimulus package boosted regional stocks and eased risk concerns, but investors treaded cautiously ahead of US jobs data that is expected to be bleak. The Philippine peso benefited from more risk appetite, rising as far as 47.20 per dollar up half of a percent from Thursday's close.
"Risk aversion eased on hopes of the passage of the stimulus plan and stocks are up," said a trader in Manila. The South Korean won gained as much as 1 percent to 1,369.8 per dollar, supported by the finance minister designate's comment that South Korea needed to take a more aggressive policy to boost domestic demand.
Analysts generally believe the won still faces some selling pressures in the near term, even as foreigners bought a combined net 1.52 trillion won worth of Korean stocks during the previous seven consecutive sessions. The won is likely to stabilise later this year, analysts say.
"While inflow tells us something about opportunity, some caution in applying a tight correlation to the won should be exercised," said Patrick Bennett, currency strategist at Societe Generale. "For the won, we believe that the worst of the losses have been seen and expect the currency to be a market-performer within Asia during the next months as other currencies make necessary adjustments to more competitive levels," he said in a note.
Asian stocks rose, following a Wall Street rally on Thursday on hopes that the US government's plan to shore up the financial system will include a change in accounting rules that would stem bank write-downs and spur lending. US President Barack Obama urged support for a $900 billion stimulus bill before Congress to stave off "catastrophe", as a surge in the number of new weekly jobless benefit claims hit a 26-year high, pointing to an economy in deep recession.
Investors expect more dismal jobs figures later in the day in the government's comprehensive monthly report on January. A Reuters poll forecast the data would show that non-farm payrolls dropped 525,000 after 524,000 of losses in December. The Malaysian ringgit gained a fifth of a percent to 3.602 per dollar.
The Singapore dollar moved between 1.5026 and 1.5067 per US dollar, around late levels on Thursday, as investors tried to limit their exposure to the recession-hit island but also fretted about possible official intervention to prop up the local unit.
"A lot of investors try to sell the Singapore dollar, but they are also wary of the authorities' stepping in," said a Singapore-based trader. Singapore's finance minister said on Thursday the economic downturn was worsening and the government may have to tap its multi-billion dollar pool of reserves for another fiscal stimulus package next year.
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