Most Asian currencies rise

Asian currencies clawed back some of their losses against the dollar on Friday after three straight days of decline, as lower bond yields and speculation that the pace of US monetary tightening will slow next year softened the greenback.
The Indian rupee and the Indonesian rupiah led the regional gains, adding about half a percent against the dollar on Friday. Both currencies were also supported by a decline in crude prices as India and Indonesia are major oil importing countries.
The Federal Reserve is this month expected to raise interest rates for the fourth time in 2018, but investors have rapidly pared back their expectations for additional rate hikes next year. Investors now await November US employment data due later on Friday for clues to how the world's top economy is faring.
However, despite the dollar's softness, analysts are still cautious on Asian currencies in the short-term. "In this midst of a more dovish Fed, AXJ currencies should have more room for respite against the dollar," said Leong Sook Mei, ASEAN head of global markets research at MUFG Bank. "But these gains are likely superficial at best in the short term given greater US equity market volatility, US Treasury yield curve inversion concerns, and higher oil prices."
The dollar index, which measures the greenback against a basket of six major peers, was little changed at 96.802. The index shed 0.3 percent during the previous session, closing at a one-week low and was down 0.9 percent from a 17-month peak hit on Nov. 12. The South Korean won rose 0.3 percent after falling over 1 percent over the past two days, while the Thai baht also gained 0.2 percent on the day.
China's yuan firmed as market sentiment recovered from fears that the arrest of senior Huawei executive could spark a re-escalation in the US-China trade war. A recent Reuters poll showed China's yuan will breach the 7 per dollar level within the next six months, and also predicted authorities would continue to exert control over the currency in 2019.
The Indonesian rupiah rose 0.4 percent against the dollar on Friday, helped by a surge in local stock markets. The rupiah has lost over 1 percent this week and was set for its biggest weekly decline in over two months. Foreigners have sold about $76 million worth of Indonesian equities over the last two days, exchange data showed.
On Thursday, Indonesia's central bank intervened in the domestic non-deliverable forward (NDF) market to support the rupiah. "(Intervention in NDF markets) will help delay, but not eliminate the demand for dollars," said Frances Cheung, head of macro strategy at Westpac.