Ringgit leads Asia FX gains ahead of US job data, most set for weekly rise

[SINGAPORE] Malaysia's ringgit led gains among emerging Asian currencies on Friday though trading was cautious ahead of key US jobs data.

Most regional units were set to post weekly gains on optimism over the handling of Greek debt woes and a rebound in oil prices.

The ringgit rose as a jump in crude prices eased concerns that weaker oil would hurt Malaysia's current account surplus and increase its fiscal deficit.

China's yuan advanced as the central bank set its strongest daily midpoint in two weeks, ahead of January trade data due on Sunday.

The South Korean won gained on expectations of demand linked to a US$1.1 billion block sale of Hyundai Glovis Co Ltd by Hyundai Motor Group's chairman and his son.

Investors were awaiting January US non-farm payroll data later in the day. Economists polled by Reuters expected US employers to add 234,000 workers in January, below December's increase of 252,000.

"I see some risks of disappointment, factoring in potential layoffs in oil sectors," said Christopher Wong, a senior FX analyst at Maybank in Singapore.

"That could lead to some short-term pullback in the dollar's strength and weigh on dollar/Asia FX."

Most emerging Asian currencies were on the course for weekly gains, led by the ringgit.

The ringgit has risen 2.3 per cent against the dollar so far, which would be its largest weekly appreciation since September 2013, Thomson Reuters data showed. Malaysian government bond prices also rose.

Singapore's dollar has risen 0.7 per cent for the week as investors covered short positions on improved risk sentiment.

The European Central Bank agreed on Wednesday to allow Greece's national central bank to grant its banks emergency funding of up to 60 billion euros (US$68.8 billion), German newspaper Die Welt reported.

Capital inflows have lifted the Thai baht and Taiwan dollar by 0.6 per cent and 0.5 per cent this week, respectively. The Indonesian rupiah has risen 0.4 per cent on bond-buying inflows.

The won appreciated 0.4 per cent as exporters' demand triggered stop-loss dollar selling.

The yuan and the Indian rupee both gained 0.2 per cent Still, traders and analysts saw risks that higher-than-expected US jobs growth would increase expectations that the Federal Reserve will raise interest rates.

That will put pressure on emerging Asian currencies amid expectations that regional central banks are likely to join the global easing club, analysts said.

"Further easing of monetary conditions is likely for Asia," said Suresh Kumar Ramanathan, head of regional interest rate and FX strategy at CIMB Investment Bank in Kuala Lumpur.

"Disappointments for Asian FX will be there if the nonfarm payroll is firmer and we are in the last leg of getting cheap entry levels for the dollar."

REUTERS