Asian currencies were steady to moderately firmer on Friday as investors remained wary about credit market risks and looked to a US jobs report for clues about the Federal Reserve's next interest rate move. The high-yielding Philippine peso eased back to 46.53 per dollar, virtually unchanged from Thursday's close, after briefly hitting 46.45 in early trade.
The Indonesian rupiah another high-yielder in Asia, was little changed at 9,397 per dollar. "US payroll release tonight and the court ruling on the Estrada case are some of the factors that we are waiting for," said a trader in Manila.
The US non-farm payrolls report is expected to show a rise of 110,000 jobs in August and investors are looking for the Fed to cut interest rates by at least 25 basis points on September 18.
Analysts expect most Asian currencies to continue to move in narrow ranges in the run-up to the Fed's rate decision, with investors treading cautiously to watch for signs of wider economic fallout from the credit market turbulence. "With the market already pricing in a cut of more than 25 basis points in September, the risk is skewed towards another spike in volatility," said Han Sia Yeo, currency strategist at Bank of America.
In the Philippines, some investors fear that a pending verdict in a trial of former president Joseph Estrada, who faces life imprisonment if found guilty of stealing up to $80 million, could fuel political uncertainty. Estrada, a former film star turned politician, who was ousted in an army-backed popular revolt in 2001, remains popular among poor voters and security officials fear a guilty verdict could provoke riots in the capital.
The South Korean won steadied near 937.9 per dollar after hitting 936.5, buoyed by foreign buying of local stocks and settlements by exporters. The Bank of Korea kept its overnight call rate steady at 5.0 percent on Friday, joining other regional central banks that have stood pat in recent weeks in the face of global market turmoil.
The Malaysian ringgit rose as far as 3.497 per dollar, up almost 0.3 percent from late Asian trade on Thursday. Analysts expect Malaysia's 2008 budget to provide a boost for the export-dependent economy and help underpin the ringgit.