February 5, 2018 / 6:30 AM / 10 months ago

EM ASIA FX-Most currencies weaken after U.S. jobs data bolsters dollar

    * Strong U.S. dollar weighs on Asian currencies
    * South Korean won region's biggest loser
    * Indonesian rupiah weakens despite positive GDP data

 (Adds text, updates prices)
    By Aaron Saldanha
    Feb 5 (Reuters) - Most Asian currencies weakened on Monday
as the dollar consolidated gains made after data showed U.S.
wages rose at their fastest in more than 8-1/2 years, fuelling
expectations and higher interest rates.
    The dollar index against a basket of six major
currencies, stood little changed at 89.127 after gaining 0.6
percent on Friday.
    The jobs report supported for the dollar, which had slipped
to a three-year low of 88.438 late in January due to factors
including perceptions of narrowing yield advantage.
    "If we start to see positive inflation surprises on a
sustained basis, then I think it will be quite damaging for
Asian currencies," said Sim Moh Siong, FX strategist at Bank of
    "If the wage pressures that we saw last Friday was a one off
for whatever reason and we see a much more gradual buildup in
wage pressures and therefore a gradual buildup in inflation
then…it could be more benign for Asian currencies."
    On Friday, San Francisco Fed President John Williams said
faster economic growth could mean it raises rates three or four
times this year. Higher U.S. rates reduce the relative
attractiveness of assets denominated in emerging market
    The U.S. data led bond yields higher, resulting in a
sell-off in Asian stocks, with every single bourse stumbling.
Japan's Nikkei sank 2.6 percent, while Australia's main
index lost 1.6 percent and Chinese blue chips
slid 0.7 percent.
    In other Asian countries, the Thai baht was among
the region's biggest losers, weakening about 0.41 percent. 
    Similarly, the Taiwan dollar slipped 0.16 percent
and the Malaysian ringgit by 0.22 percent.
    Moving in the other direction, the Singapore dollar
firmed about 0.17 percent.
    India's rupee firmed about 0.02 percent. The
country's central bank is scheduled to set rates including the
repurchase rate and the cash reserve ratio on Wednesday. 
    The Chinese yuan was 0.05 percent firmer despite
the People's Bank of China setting the mid-point fixing rate at
6.3019 against the dollar, weaker than the previous fix of
6.2885 on Friday.
    South Korea's won was 0.92 percent weaker against
the dollar, after touching its weakest level since the middle of
    "The won itself to me is more a position adjustment of what
we have seen so far rather than an indication that we are going
to see sustained weakness for the won," added Bank of
Singapore's Siong.
    Indonesia's rupiah weakened 0.35 percent, shrugging
off firm economic growth numbers.
    Indonesia's economy grew at its fastest pace in four years
in October-December, the statistics bureau said on Monday.

    The following table shows rates for Asian currencies against
the dollar at 0544 GMT.
      Change on day at 0544 GMT                                
  Currency                              Latest  Previous    Pct
                                           bid       day   Move
  Japan yen                          109.970       110.1  +0.12
  Sing dlr                           1.317        1.3193  +0.17
  Taiwan dlr                         29.283       29.235  -0.16
  Korean won                         1089.700     1079.7  -0.92
  Baht                               31.490        31.36  -0.41
  Peso                               51.480        51.45  -0.06
  Rupiah                             13495.000     13448  -0.35
  Rupee                              64.040        64.06  +0.02
  Ringgit                            3.894         3.885  -0.22
  Yuan                               6.296        6.2990  +0.05
  Change so far                                                
  Currency                           Latest     End 2017    Pct
                                     bid                   Move
  Japan yen                          109.970      112.67  +2.46
  Sing dlr                           1.317        1.3373  +1.53
  Taiwan dlr                         29.283       29.848  +1.93
  Korean won                         1089.700    1070.50  -1.76
  Baht                               31.490        32.58  +3.46
  Peso                               51.480        49.93  -3.01
  Rupiah                             13495.000     13565  +0.52
  Rupee                              64.040        63.87  -0.27
  Ringgit                            3.894        4.0440  +3.87
  Yuan                               6.296        6.5069  +3.35
 (Reporting by Aaron Saldanha, Additional reporting by Nicole
Pinto in Bengaluru; Editing by Sam Holmes)
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