The Taiwan dollar rose to a five-week high against the US dollar on Friday, helped by foreign fund inflows, while most other Asian currencies were steady ahead of a key US jobs report later in the day.
The Philippine peso hit a 4-1/2 year peak, lifted by news on Thursday that Moody's Investors Service had raised its sovereign credit outlook on the Philippines to stable from negative.
The Taiwan dollar strengthened more than half a percent to a high of 32.86 to the US dollar. It has under-performed most Asian currencies in recent months, but a combination of foreign buying of locals stocks, an unwinding of carry trades and a break of chart levels allowed the Taiwan dollar to rebound.
Taiwan's main stock index rose more than 1 percent on Friday, led by gains in shares such as Far Eastern International Bank on news that part of its holdings would be sold to HSBC.
Foreign funds bought a net T$5.951 billion worth of shares on Friday and T$3.626 billion on Thursday. "The key point is that Taiwan is drawing foreign equity flows and that is helping the Taiwan dollar," said Sean Callow, a currency strategist at Westpac Bank. "Also there is a bit of self-perpetuating price action - a dollar support level was broken and that triggered some profit taking." But Callow said that the latest move in the Taiwan dollar was a correction and its downtrend remained intact.
The Taiwan dollar is the region's worst-performing currency this year against the US dollar. Markets are looking for clues on dollar direction from the US non-farm payrolls report due at 1330 GMT, after data on Thursday showed a bigger-than-expected rise in third-quarter unit labour costs and weaker-than-expected productivity.
Economists polled by Reuters expect the US economy to have created 125,000 new jobs in October, up from 51,000 in September. "The market is looking for signs of tightness in the labour market that could make the Fed stay on a tightening bias and that could support the dollar," said BNP Paribas currency strategist Thio Chin Loo.
The Singapore dollar hovered at about 1.5610 per US dollar, off Tuesday's nine-year high at 1.5560, while the Thai baht hugged a narrow range around 36.70 per dollar.
The South Korean won touched a 5-1/2 month high at 937.2 per dollar, prompting the country's vice finance minister to warn he was concerned about the won's recent surge.
A holiday in Japan contributed to subdued trade in Asia. The peso hugged a tight range ahead of the US data but nudged up to a new 4-1/2 year high at 49.67 per dollar.
"The peso move is mostly to do with the Moody's upgrade of the ratings outlook," said a trader in Manila. The Philippine central bank was also in focus after it surprised investors on Thursday by cutting overnight borrowing rates for deposits above 5 billion pesos ($100 million), easing monetary conditions but without cutting its headline rates. Another trader in Manila said he had expected the central bank to ease policy.
"After what the central bank did yesterday, there were some (peso) buying and we did expect some buying early this morning," said the trader. "It's less attractive to hold on to the peso now. But we still expect the peso to strengthen further, maybe to 49.25 in the next few weeks or even next few days."