Asia FX firms as dollar extends losses before nonfarm payrolls
Investing.com-- Most Asian currencies advanced on Friday, while the dollar eased further as traders bet that the Federal Reserve was done with its interest rate hikes, although anticipation of key nonfarm payrolls data kept gains in check.
Regional trading volumes were also somewhat muted on account of a Japanese market holiday.
Rate-sensitive, risk-heavy units such as the South Korean won, Philippine peso and the Indonesian rupiah were the best performers for the day, rallying between 0.5% and 1%.
The Japanese yen rose 0.1% in holiday-thinned trade, but still remained close to its weakest level in one year, at above 150 against the dollar. This kept traders wary of any intervention by the Japanese government in currency markets, after the Bank of Japan struck a less hawkish tone earlier this week.
The Chinese yuan was flat, hovering around a one-year low following a string of weak economic readings this week. A private survey showed on Friday that Chinese service sector activity grew less than expected in October, although it did accelerate slightly from the prior month.
Broader Asian currencies advanced, while the dollar nursed some losses for the week after the Fed kept rates steady, and offered somewhat dovish signals on more interest rate hikes.
This spurred increased bets that the central bank was done with its rate hikes for the year, and will begin cutting rates from mid-2024. The dollar index and dollar index futures fell slightly in Asian trade, and were down 0.4% for the week.
But the dollar still faced one more major test on Friday, with key nonfarm payrolls data for October due later in the day.
Any signs of resilience in the labor market gives the Fed more impetus to hike interest rates, which could in
Read more on investing.com
