SINGAPORE: Asian currencies climbed largely on Monday after US jobs data confirmed a shocking fall in wages and motivated shareholders to pare their bullish bets on the greenback.
Leading the gains were the South Korean won and the Indonesian rupiah, with the won hitting a two-month high of 1,080.5 versus the dollar. Analysts said the won faced stiff chart resistance at the 1,080.0 level.
The Indonesian rupiah touched a one-week high of 12,550 versus the dollar.
The firm tone of Indonesian bonds on Monday helped support the rupiah, said an Indonesia-based trader, adding that there may be some inflows of overseas funds into local debt.
Indonesia’s 10-year bond yields slipped by about 6 basis points on the day to 7.681 percent, edging back in the direction of an early December trough of 7.665 percent.
US jobs data on Friday showed that wages posted their biggest decline in at least eight years despite a solid rise in nonfarm payrolls in December.
While December’s earnings decline bolstered the case for the Fed to take a go-slow approach to raising interest rates, it did not remove a possible June rate hike from the table, economists said. A Reuters survey of big banks showed many economists still expect the Fed to raise interest rates by June.
Market participants said the dollar could retreat further in the near term if coming US economic data prompts investors to reassess the possible timing and pace of Fed tightening.
“In the near term, watch for further degradation of interest rate differentials undermining the US dollar if the data stream out of the US continues to diffuse Fed-related expectations,” Emmanuel Ng, an analyst for OCBC, said in a research note.
