MOST Asian currencies fell on Monday, with the Malaysian ringgit and the Indonesian rupiah sliding the most, while stocks rose after stronger-than-expected U.S. jobs report reinforced bets for a healthy soft landing in the world's largest economy.
The U.S. jobs report last Friday pointed to a resilient economy and spurred markets to reduce pricing for Federal Reserve rate cuts, strengthening the U.S. dollar.
This led to a weakening in Asian currencies, with the Malaysian ringgit dipping as much as 1.4%, its lowest since mid-September, closely followed by the Indonesian rupiah, which slipped as much as 1.3% to lows last seen in mid-August.
The MSCI's gauge of emerging market currencies was down as much as 0.4% during trade, hovering close to a three-week low. Asian equities, on the other hand, gained, with the MSCI's broadest index of Asia-Pacific shares outside Japan up about 0.5%.
"With fears of a U.S. hard landing getting pushed aside, that should help to contribute towards better performing equities, which should attract foreign investor flows, which would ultimately start to see Asian FX recover," said Khoon Goh, head of Asia research at ANZ.
"The sellout we are seeing today might extend later into the week."
Manila stocks jumped 1.8% to lead gains in Southeast Asia. They also hit their highest level in more than four-and-a half years. Manila's lead was followed by equities in Taipei which were up 1.3%.
Asian markets await a data-heavy week ahead, kicked off by Thailand's annual headline inflation, which quickened in September due mainly to higher prices of diesel and some vegetables, but still below the central bank's target range of 1% to 3%.
Thailand's baht weakened 1.1%, while local stocks edged 0.1% higher.
Also due this week is Taiwan's inflation print for September and central bank decisions in South Korea and India on their base rate and repurchase rate respectively.
Traders will also closely look at the key National Development and Reform Commission (NDRC) press conference in China on Tuesday, when the markets reopen after a week-long holiday.
NDRC officials will brief reporters on steps to implement policies to promote economic growth.
Their comments could determine whether the rally in Chinese stocks before the Golden Week holiday will continue, "with a possible impact on emerging Asian assets," according to Khoon.
HIGHLIGHTS:
** Japan's new finmin says will monitor impact of rapid FX moves
** Hong Kong shares hit 2-1/2-year high ahead of China's return
** Seven & i considers supermarket stake sale ahead of IPO, sources say
** Indonesia's Prabowo wants gradual increase in debt-to-GDP, adviser says - Reuters
