ASEAN currencies slide

Nov 6 (Reuters) – Most Asian currencies struggled on Monday after uninspiring U.S. jobs data issued late last week failed to dim the prospects of another U.S. Federal Reserve rate hike in December.

Friday’s employment report showed a slowdown in U.S. wage growth and a smaller-than-expected increase in nonfarm payrolls in October, but analysts held to their expectations of a Fed rate hike at the end of the year. The dollar climbed to its highest level in nearly eight months against the yen after the Bank of Japan said it will continue with powerful monetary easing under its yield curve control policy. Investors are bullish on the U.S. dollar, said Stephen Innes, head of trading in Asia-Pacific for Oanda in Singapore, noting: “There is profit-taking in Asian currencies across the board now.”

The declines in Asian currencies were also due to weakness in region’s equity markets. MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.7 percent, led by losses in South Korea, Singapore and Taiwan shares.

“The risk sentiment is wobbling a little bit,” said Oanda’s Innes.

The South Korean won dropped more than half a percent against the dollar on the day. South Korea’s finance minister said on Friday that the government was closely watching currency movements because the won’s recent gains against the dollar seemed excessively fast. The won has gained about 2.5 percent over the last month.

Times of India via Reuters

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Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes