The Philippine peso and the Indian rupee fell against the dollar on Friday, leading Asian currencies lower, as caution ahead of key US job data spurred dollar short covering. Investors are keeping an eye on December US non-farm payrolls later in the day, which is expected to add to evidence of a stronger recovery in the world's top economy, further bolstering prospects for the dollar.
The data is unlikely to boost Asian currencies much, although they are expected to stay firm this year on stronger economic fundamentals in the region and abundant liquidity, analysts and dealer said. "A figure in line with or above forecasts will lift the dollar and make investors more reluctant to buy Asian currencies," said Jeong My-young, a currency strategist in Seoul. "If the figure disappoints markets, that will cause investors to shun riskier assets, prompting further dollar-short coverings," she added.
The peso opened at 44.00 per dollar and weakened to as soft as 44.12 with market spooked by further dollar short covering interest. The peso is seen weakening to as soft as 44.20 unless the central bank steps into the market, dealers said. But it found a strong support line at 44.30 per dollar. Bucking the softer regional tone, the Taiwan dollar rose over 2 percent against the US dollar. "Foreign funds keep buying dollar, they expect positive news from the US non-farm payrolls," said one trader at a local bank. The Taiwan dollar rose to as firm as T$29.220 on early trading, compared with its previous close of T$30.101.