Most Asian currencies rose slightly on Friday, although gains were limited by lack of direction from China and rising death toll and case count from a new coronavirus.
Trading volumes were thin, with financial markets in China, Taiwan and South Korea closed for the Lunar New Year.
The World Health Organization (WHO) on Thursday declared the virus outbreak an emergency for China but stopped short of declaring it an international concern, offering some comfort to investors.
The virus had killed 25 people in China and infected more than 800 by Thursday.
“With several Asian markets seeing a holiday-shortened trading week ahead, investors will be hoping that the outbreak doesn’t worsen over the coming days,” Han Tan, market analyst at Cyprus-based brokerage FXTM, wrote in a note.
“Still, regional markets could see an outsized reaction when trading resumes, should pent-up concerns be unleashed if the virus’ spread worsens drastically over the near-term.”
The Indonesian rupiah firmed 0.4 percent against the dollar, after Bank Indonesia (BI) kept interest rates on hold on Thursday.
BI said the country’s economic cycle had passed its lowest point and would now continue to improve, adding that the rupiah’s level remained in line with fundamentals and was expected to remain stable.
The Malaysian ringgit and the Philippine peso strengthened 0.3 percent each. The Singapore dollar strengthened marginally.
Meanwhile, the dollar rose to a near eight-week high against the euro on Friday as lukewarm European PMI data added to the broader market conviction that European central bank policymakers will maintain a loose monetary policy for the near future.
Euro zone business activity remained lackluster with the IHS Markit’s Euro Zone Composite Flash Purchasing Managers’ Index (PMI), seen as a good gauge of economic health, holding at 50.9 in January but missing the median prediction in a Reuters poll for 51.2.
That followed an earlier PMI from Germany, Europe’s largest economy, which showed the private sector gained momentum.
The euro was 0.21 percent lower against the greenback at $1.1029.
“The move partly reflected a phase of broader euro weakness following the release of the flash Eurozone January PMI data showing a miss in the composite headline, at 50.9, despite a firm German reading,” Jonathan Coughtrey, managing director, at Action Economics said in a note. — Reuters
