Most Asian emerging stocks and currencies posted weekly drops, with the Philippine peso hitting a record low and Taiwan’s benchmark index leading losses on Friday, as investors maintained a cautious stance ahead of a key US jobs report.
Equities in Southeast Asia were mixed, with bourses of Taiwan and Singapore being the top laggards. Stocks in Manila and Jakarta gained 1.1 percent and 0.3 percent, respectively.
The US dollar index, which measures the greenback against a basket of six major currencies, stood near its two-decade peak after a solid US manufacturing survey and labor market report hinted at the economy’s resilience.
A firmer US dollar assuaged appeal for riskier assets in emerging Asia, with the Philippine peso hitting a record low of 56.880 per dollar. The peso lost 1.1 percent so far this week.
“PHP sentiments will likely remain fragile near-term, amid widening Fed-BSP (BangkoSentral ng Pilipinas) policy divergence, worsening trade deficits, as well as reduced buffers in the form of declining FX reserves,” said Tan Yanxi, FX strategist at Maybank.
“But one tentative bright spot for PHP could be the softening in oil prices thus far in 3Q, which could help ease the burden from elevated energy import costs.”
The Philippines is among the biggest net importers of oil in Southeast Asia.
Market focus is now on the US August nonfarm payrolls data to gauge whether the US Federal Reserve will continue its aggressive policy tightening path.
“Generally robust US data compounds fears that the Fed can and will continue to hike aggressively as the economy appears able to handle more tightening,” said Nicholas Mapa, senior economist at ING.
