SINGAPORE: Asian currencies rose broadly on Monday after US jobs data showed a surprise drop in wages and prompted investors to pare their bullish bets on the greenback.
Leading the gains were the South Korean won and the Indonesian rupiah, with the won hitting a two-month high of 1,080.5 versus the dollar. Analysts said the won faced stiff chart resistance at the 1,080.0 level.
The Indonesian rupiah touched a one-week high of 12,550 versus the dollar.
The firm tone of Indonesian bonds on Monday helped support the rupiah, said an Indonesia-based trader, adding that there may be some inflows of overseas funds into local debt.
Indonesia's 10-year bond yields slipped by about 6 basis points on the day to 7.681 percent, edging back in the direction of an early December trough of 7.665 percent.
US jobs data on Friday showed that wages posted their biggest decline in at least eight years despite a solid rise in nonfarm payrolls in December.
While December's earnings decline bolstered the case for the Fed to take a go-slow approach to raising interest rates, it did not remove a possible June rate hike from the table, economists said. A Reuters survey of big banks showed many economists still expect the Fed to raise interest rates by June.
Market participants said the dollar could retreat further in the near term if coming US economic data prompts investors to reassess the possible timing and pace of Fed tightening.
"In the near term, watch for further degradation of interest rate differentials undermining the US dollar if the data stream out of the US continues to diffuse Fed-related expectations," Emmanuel Ng, an analyst for OCBC, said in a research note.
SINGAPORE DOLLAR
Analysts at Credit Suisse, who previously expected no change, now say they anticipate the Monetary Authority of Singapore will ease monetary policy at its next policy review in April.
"Underlying the change in our view is the weaker outlook for headline inflation, which could have made the central bank more concerned," they said in a research note.
The most likely course of action by the MAS in April is to reduce the upward slope of the Singapore dollar's policy band, and the next most likely outcome is a shift to a policy of zero appreciation, the Credit Suisse analysts said.
Many economists expect the MAS to stick to its tight stance of allowing a "modest and gradual" appreciation of the Singapore dollar at its next policy review in April and to keep all related policy settings unchanged.
But there is a minority view that the MAS will ease policy in April, as weak oil brings disinflationary pressures and growth momentum remains tepid.
The MAS manages monetary policy by letting the Singapore dollar rise or fall against the currencies of its main trading partners within an undisclosed trading band.
original source: http://www.brecorder.com/top-news/1-front-top-news/216527-rupiah-and-won-lead-gains-as-dollar-slips-after-us-jobs-data.html