Weak US data lifts Asian currencies; won near one-month high

Emerging Asian currencies rose on Thursday as disappointing US employment, factory activity and first-quarter growth figures suggested that the Federal Reserve would not hurry to raise interest rates.

South Korea’s won hit a near one-month high on stop-loss dollar selling by offshore funds. The Malaysian ringgit advanced on short-covering.

US employment data

US private employers added 189,000 jobs last month, the smallest gain since January 2014, an ADP National Employment Report showed, ahead of official US non-farm payrolls data on Friday.

US factory activity in March hit a near two-year low, while the world’s top economy slowed significantly in the first quarter. That weak economic data increased expectations that the Fed might delay its decision to start raising interest rates, causing investors to cut bearish bets on emerging Asian currencies.

“The dollar could trade soft and Asians could stay firm into the non-farm payrolls (NFP) tomorrow,’’ said Christopher Wong, a senior currency analyst at Maybank in Singapore.

“But it is too soon to say that the dollar has lost momentum. The ADP has understated the NFP data by about 74,000 on average in the past four months,’’ he said.

A Reuters survey predicted payrolls increased 245,000 last month after rising 295,000 in February.

Korean won

The won rose 0.5 per cent to 1,096.6 per dollar, its strongest since March 4. The South Korean currency found further support from the central bank data showing the current account surplus in February hit a record high of $10.77 billion in seasonally adjusted terms.

The currency pared some gains as the foreign exchange authorities were suspected of intervening to stem its strength, traders said.

The won has chart resistance at 1,096.7 per dollar, the 61.8 per cent Fibonacci retracement of its depreciation from January to March, analysts said.

Malaysian ringitt

The ringgit rose as traders continued to unwind bearish bets on the worst-performing Asian currency so far this year. Malaysia’s government bond prices extended gains, with the five-year debt yield down to 3.554 percent, its lowest since December 2013.

“Some people started shorting USD/MYR. The dollar is not going to rise,’’ said a senior Malaysian bank trader in Kuala Lumpur.

The ringgit may strengthen to 3.6500 per dollar, said the trader, adding that level had provided resistance in March.

Indonesian rupiah

The rupiah gained on demand from custodian banks. Foreign investors were net buyers in Indonesia’s stock market in the two previous sessions.

State-run banks also bought the Indonesian currency, which some traders suspected was intervention by the central bank to support the unit. Offshore real-money funds bought the rupiah in overnight non-deliverable forwards markets.

The official Jakarta Interbank Spot Dollar Rate, which the central bank introduced in 2013 to manage exchange rate fluctuations, was fixed at 13,000 rupiah per dollar, stronger than the previous 13,043. Local importers bought the dollar on dips for payments, limiting the rupiah’s gains.

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