Most Asian currencies firmed slightly on Friday, but all the units ended the week lower due to lingering pressures of an increasingly hawkish Federal Reserve, while investors awaited US jobs data to assess the need for faster rate hikes.
For the first week of 2022, the Malaysian ringgit and the South Korean won are set to lose about 1 percent each, and the Thai baht is eyeing its worst weekly decline since early December even after a positive start.
Among equities in the region, India’s Nifty 50 was set to log 2.7 percent weekly gain, its best in four months, despite Asia’s second-biggest economy witnessing a surge in new COVID-19 cases, a jump of 117,100 on Friday – a five-fold increase in a week.
Singapore shares were chasing over 2 percent weekly gains, their best since mid-March, while Malaysian and Philippine benchmarks were poised for about 2 percent losses each.
The Indonesian rupiah snapped a four-session losing streak to firm 0.3 percent over the day. It lost 1 percent since the start of 2022, dampened by chances of faster US rate hikes, a firm dollar and the government’s decision to ban coal exports in January, setting it up for a 0.7 percent weekly dip.
The Indonesian 10-year benchmark yield scaled a near three-week high of 6.445 percent after slumping to a more than one-month low earlier in the week, as US Treasury yields rose on the possibility of early Fed monetary tightening.
“Indonesian bonds are buffeted by external factors such as rising US yields and a more hawkish Fed, which may drive some bond outflows from Indonesia in the short term and a bump up in yields,” said Wei-Liang Chang, FX and credit strategist at DBS Bank.
