STI

EMERGING MARKETS-Asian FX, equities set for weekly gains ahead of US jobs data

Credit: REUTERS/THOMAS WHITE

By John Biju

March 8 (Reuters) - Most Asian currencies and equities were set for weekly gains on Friday ahead of crucial U.S. jobs data, buoyed by prospects of U.S. rate cuts later this year, with equities in Taiwan heading for their best weekly performance in more than a year.

Optimism over artificial intelligence-linked stocks, which swept global markets recently, helped Taiwan stocks .TWII surge 4.5% this week and hit record highs, in what could be their best week since Feb. 3, 2023.

Equities in South Korea .KS11 climbed more than 1% for the week, eyeing their best week since early February.

MSCI's gauge of emerging market currencies .MIEM00000CUS rose as much as 0.3% on the day to its highest level since early January.

Prospects of the start of a rate easing cycle by the U.S. Federal Reserve firmed after Chair Jerome Powell on Wednesday said that rate reductions will "likely be appropriate" later this year. He added on Thursday that the central bank is "not far" from gaining the confidence it needs in falling inflation to begin cutting interest rates.

"The Fed was very careful saying that while they are not in a rush to cut interest rates, the rate cut is still on the agenda. That was quite reassuring for the market," said Sim Moh Siong, an FX strategist at Bank of Singapore.

Investors now await the U.S. nonfarm payrolls report, due later on Friday, with expectations for job growth to slow in February.

Upbeat risk sentiment following Powell's comments helped Asian currencies post broad gains, with the South Korean won KRW=KFTC climbing 0.8%, set for its best day since Dec. 14. The Indonesian rupiah IDR= jumped 0.4%.

For the week, the Singapore dollar SGD= and Philippine peso PHP= rose 0.9% each, with the former eyeing its best week since Nov. 17 and the peso on track for its best week since Nov. 3.

The Malaysian ringgit MYR= advanced more than 1% for the week, eyeing its best week since July 14, 2023.

The currency rose 0.3% on the day to hit its highest level since Jan. 16.

Bank Negara Malaysia (BNM) stood pat on interest rates for a fifth straight meeting on Thursday, reiterating that the currency was undervalued and did not reflect Malaysia's positive economic fundamentals and prospects.

"BNM will remain a steady pair of hands for the rest of 2024 in our view. We expect no changes to the policy rate, at 3%, while BNM remains mindful of external (specifically currency) developments," Lavanya Venkateswaran, a senior ASEAN economist at OCBC, said in a note.

Inflation data from China, due on March 9, and from India next week will also be on investors' radar.

HIGHLIGHTS:

** Bullish positions on Indian rupee at over two-year high; Asian FX bears hold ground

** India Feb consumer price inflation forecast to edge lower

** Revised Japan Q4 GDP data to show economy likely avoided recession

Asia stock indexes and currencies at 0721 GMT

COUNTRY

FX RIC

FX DAILY %

FX YTD %

INDEX

STOCKS DAILY %

STOCKS YTD %

Japan

JPY=

+0.02

-4.69

.N225

0.23

18.60

China

CNY=CFXS

+0.04

-1.29

.SSEC

0.61

2.39

India

INR=IN

-

+0.51

.NSEI

-

3.51

Indonesia

IDR=

+0.38

-1.25

.JKSE

0.19

1.59

Malaysia

MYR=

+0.30

-2.11

.KLSE

0.21

5.80

Philippines

PHP=

+0.34

-0.38

.PSI

1.53

7.63

S.Korea

KRW=KFTC

+0.84

-2.41

.KS11

1.24

0.94

Singapore

SGD=

+0.08

-0.98

.STI

0.44

-2.86

Taiwan

TWD=TP

+0.34

-2.21

.TWII

0.47

10.34

Thailand

THB=TH

+0.23

-3.60

.SETI

0.78

-2.33

Graphic: World FX rates https://tmsnrt.rs/2RBWI5E

Asian stock markets https://tmsnrt.rs/2zpUAr4

(Reporting by John Biju in Bengaluru; Editing by Michael Perry and Sonia Cheema)

((John.Biju@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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