Most Asian FX, stocks decline; traders await US jobs report

THE South Korean won fell more than 1% on Thursday, leading declines among emerging Asian currencies as investors stayed cautious ahead of a key U.S. jobs report that is expected to provide clarity on the Federal Reserve’s future interest rate trajectory.

Most Asian equities were also down, with stocks in Manila losing as much 1.2%, marking their worst day since late October.

Singaporean shares fell as much as 1.1% to a near five-week low, before paring some losses.

Among currencies, the won fell for the third straight day as much as 1.1% to trade at 1327.20 per dollar, hitting its lowest in about three weeks.

“The USD/KRW pair is trading towards 1,320, with KRW strength dampened by a softer RMB (renminbi) and a marked softening in Korea’s inflation,” analysts at DBS wrote.

“Core inflation is not falling that quickly, easing slightly for November, which could underpin Bank Of Korea’s decision to hold rates for a longer period, supporting the KRW,” they added.

Thailand’s baht fell about 0.4% after the country reported its November inflation print at its lowest in nearly three years. Stocks traded 0.6% lower.

The Singapore dollar fell for the fourth straight session, while the Taiwan dollar and Malaysian ringgit traded flat and 0.2% lower.

Separately, data on Wednesday showed U.S. private payrolls increased less than expected in November, in yet another sign that the labour market is gradually cooling.

Market participants will now focus on the non-farm payrolls report on Friday, which is likely to give a clearer view of the Fed’s future actions.

“Thus far, however, even as labour market metrics turned out to be softer than anticipated, USD continues to rise,” Maybank analysts wrote.

The dollar index, which measures the strength of the greenback against six major rivals, was at 104.07 at 0650 GMT.

Investors also digested mixed economic data from China, which showed an uptick in exports while imports fell sharply, suggesting that domestic demand was still subdued. Chinese stocks fell as much 0.7%, while the yuan traded flat.

The Japanese yen however surged about 0.7%, after expectations that the country’s central bank will soon exit its negative rate policy buoyed the currency.

Among other Asian equities, stocks in Taipei, Mumbai and Kuala Lumpur and Jakarta traded down between 0.1% and 0.5%.

HIGHLIGHTS:

** Indonesia’s benchmark 10-year bond yield falls to 6.580%

** ASEAN+3 agree on new financing facility to fend off crisis

** Malaysia launches plan to boost biomass co-firing, investments by 2030