SINGAPORE: The South Korean won was set for its worst week in almost 1-1/2 years, leading weekly losses in emerging Asian currencies on Friday, with the dollar firm as US jobs data was expected to build a case for a Federal Reserve interest rate rise next year.
The region's currencies drew no support from European Central Bank President Mario Draghi's pledge to ease further, as the dovish stance pushed up the dollar.
US nonfarm payrolls data due later in the day is expected to show an 231,000 increase in October after rising 248,000 in September, a Reuters poll showed. Data released on Thursday showed new claims for jobless benefit fell more than expected last week.
The greenback is seen rising further if the payrolls report points to a solid recovery in the job market. That will put pressure on emerging Asian currencies, traders and analysts said.
"A weaker Asian FX trend stays intact on monetary policy differentials," said Jeong My-young, Samsung Futures research head in Seoul, adding the won may lead the regional depreciation due to the yen's weakness.
"They may rebound as the dollar may see corrections after the jobs data. But that would be just profit-taking."
Central banks in Asia took dovish stances while the Fed is expected to raise borrowing costs in the middle of next year thanks to a recovery in the world's largest economy.
On Thursday, Malaysia's central bank warned that global growth could hurt the export-focused economy, although it left its key interest rate unchanged at 3.25 percent.
The Bank of Thailand on Wednesday left the door open to a possible rate cut due to its slowing economy, while the Philippine central bank suggested it is likely to leave borrowing costs on hold for the rest of the year.
Last week, the Bank of Japan unexpectedly eased monetary policy, raising expectations of a further rate cut by South Korea's monetary authority.
WEEKLY LOSSES
The won has lost 2.2 percent against the dollar so far this week, which would be the largest weekly depreciation since late June 2013, according to Thomson Reuters data.
South Korean Vice Finance Minister Joo Hyung-hwan was quoted on Thursday as saying that the government would manage the won to align with the weakening yen.
A ministry official later told Reuters that the government would work towards keeping the won from falling out of sync with other currencies moves.
Caution increased over possible intervention by the foreign exchange authorities as the won hit a six-year high against the yen on Thursday.
"Given government rhetoric in Seoul, we expect the KRW to respond strongly to JPY/USD movements in the coming weeks and months," said the Royal Bank of Scotland said in a note to clients.
South Korean and Japanese companies compete for a similar group of products such as cars on major markets around the world.
The Malaysian ringgit has fallen 1.7 percent against the dollar so far this week, which would be the biggest weekly loss since late September 2013.
Malaysia's exports rose 2.0 percent in September from a year earlier, below a forecast of 2.7 percent growth in a Reuters poll.
Foreign investors cut holdings in the country's bonds in September, central bank data showed. Offshore funds sold the currency amid concerns that lower oil prices would hurt economic fundamentals of the net oil exporter and major palm oil producer.
The Thai baht has slid 1.0 percent with the central bank's dovish stance. The Singapore dollar has eased 0.8 percent, while the Indonesian rupiah has lost 0.6 percent.
Both the Taiwan dollar and the Philippine peso have fallen 0.4 percent each.
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