BENGALURU: Most Asian currencies and stocks started the week muted with investors looking for clues on the outlook for inflation, while a mixed jobs report from the United States pointed towards the possibility of a rate cut in the coming months.
Monthly payrolls from the world’s largest economy late on Friday revealed an acceleration in jobs growth but also showed that unemployment reached a two-year high, boosting chances of a rate cut in June.
Traders are looking to US consumer price inflation data set to be announced late on Tuesday in an otherwise light data week, with bets on a rate cut in June from the US Federal Reserve currently standing at 73%, according to the CME FedWatch tool.
At 0400 GMT, the dollar index – which measures the strength of the greenback against six major currencies – was hovering at 102.7.
In Asia, the Thai baht was the biggest loser among emerging Asian currencies, depreciating about 0.2%, while the Taiwan dollar fell marginally. Other currencies such as the Singapore dollar, Philippines peso and the Malaysian ringgit were trading flat, the ringgit not far from its 26-year low.
The South Korean won was the outlier, rising about 0.4%.
“External market drivers will continue to affect the (Asian) currencies. If the view on the Fed is maintained, and incoming data in the US support the view further, Asian currencies would continue rising against USD,” analysts from Sumitomo Mitsui Banking Corp said in a research note.
Elsewhere, China reported a rise in consumer prices for the first time in six months for February. This comes as Asia’s largest economy grapples with a protracted property crisis, crushing consumer sentiment and demand.
