SINGAPORE: Most emerging Asian currencies rose on Friday ahead of US jobs data due to be released later in the global day, leaving them set to post another week of gains on speculation that the Federal Reserve will raise interest rates more slowly than previously expected.
Investors unwound bearish bets on regional units further as the US dollar wallowed at a 15-week low against a basket of six major currencies.
The greenback lost ground following data showing the number of Americans filing for jobless benefits rose more than expected last week.
A US nonfarm payrolls (NFP) report due to be released later is expected to show that employers added 190,000 jobs in January, a Reuters poll of economists showed.
"NFP has to surprise on the upside significantly to put a floor under the USD/Asia. The likelihood of a March hike has fallen quickly to just one-in-ten," said Andy Ji, Asian currency strategist for Commonwealth Bank of Australia in Singapore.
Asian currencies may weaken again only if the job growth number is 220,000 or higher, Ji added.
Fed funds futures contracts on Thursday suggested traders were pricing in just a 10 percent probability of a Fed rate hike
next month and a 41 percent chance by the end of the year, according to CME FedWatch.
That came after some weak US economic data and dovish comments from New York Federal Reserve President William Dudley on Wednesday.
SINGAPORE DOLLAR LEADS
Growing expectations of a slower Fed rate hike spurred investors to dump dollar holdings against emerging Asian currencies this week, although traders took profits from regional units ahead of the Lunar New Year holidays next week.
Many of Asian financial markets will be closed early next week with China shut for the whole of the week.
The Singapore dollar benefited the most, leading weekly gains among regional units. The city-state's currency has risen 1.7 percent against the greenback so far this week, which would be the largest weekly gain since early October.
"We undertook a tactical short USD-SGD on the premise that the broad dollar may stumble further if investor scepticism towards the Fed heightens multi session," said Emmanuel Ng, a foreign exchange strategist with OCBC Bank, in a client note.
Indonesia's rupiah has advanced 1.3 percent so far this week as investors sought one of the highest yields in the region.
The Thai baht has also gained 0.6 percent throughout this week on bond inflows. Malaysia's ringgit has gained 0.4 percent so far this week.
The South Korean won was on the course for a 0.1 percent weekly rise on stop-loss dollar selling and exporters' demand for settlements.
But the won's advances were pared as foreigners sold South Korean stocks and bonds, traders said.
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