Emerging Asian currencies were trading cautiously on Friday ahead of a key US jobs report that may provide clues on the trajectory of interest rates, while the Philippine peso hit a more than three-week low.
Malaysia’s ringgit rose 0.2% and Indonesia’s rupiah appreciated 0.1%.
The Singapore dollar and India’s rupee traded flat.
The dollar index, which measures the US currency against six major peers, hung back from a four-week high and boosted appetite for riskier assets as it fell 0.068% to 102.38 in early Asia trade.
Data showed US worker productivity rebounded sharply in the second quarter, helping to curb growth in labour costs and offering another boost to the improving inflation outlook.
Another report found the number of Americans filing new claims for unemployment benefits rose slightly last week, while layoffs dropped to an 11-month low in July.
Markets keenly awaited the US nonfarm payrolls report due later in the day.
The monthly payrolls update may well offer both Asian equities and Asian FX a much needed breather for consolidation, UOB analysts said in a note.
Meanwhile, the Philippine peso weakened 0.3% to lead losses in the region.
It is set for a 1.4% decline this week.
The Bangko Sentral ng Pilipinas (BSP) is ready to raise interest rates if necessary as the country is not yet out of the inflation woods, its governor, Eli Remolona, said.
The comments from the governor came ahead of the release of official data that showed annual inflation eased for a sixth month in July due to slower increases in food and utility costs.
“In terms of monetary policy, we still think BSP’s hiking cycle is over and that it is on a prolonged pause,” analysts at Nomura said in a note.
“The bar for BSP to start its cutting cycle in the near term remains high, in our view, and will be carefully assessed by BSP with due consideration of the Fed outlook to avoid adding to FX pressures and the risk of capital outflows.”
Equities in Shanghai advanced 0.3%, while the Chinese yuan eased 0.1%.
China’s central bank governor pledged on Thursday to guide more financial resources towards the private sector, suggesting refreshed urgency from Beijing to bolster the confidence among private firms as economic momentum weakens.
Stocks across emerging Asia were mixed. Equities in Kuala Lumpur and Bangkok both rose 0.3%. Shares in the Philippines, Singapore and Taiwan all fell 0.1%.