BENGALURU: Asian equities were poised to end a turbulent week on a steady note, with Thailand’s stocks leading the charge on Friday, while currencies edged higher ahead of crucial US monthly payrolls data that could set the stage for outsized rate cuts.
The MSCI Emerging Markets index increased 0.4% on Friday, but was on track for a weekly decline of more than 2%.
Thailand’s benchmark stock index gained 1.8% to its highest since Jan. 5 and was on track for its strongest weekly rise since January 2021 with a near 5% jump as a stabilising political environment and measures taken to boost capital flows improved risk appetite.
Taiwan’s shares rose 1.1%, but were poised for their biggest weekly drop since mid-April. Stocks in Jakarta advanced 1% to a record high of 7,754.48.
Market focus was on the US nonfarm payrolls data due later in the day and the report is expected to influence the size of the interest rate cut that the US Federal Reserve will likely deliver on Sept. 18.
Traders view a quarter-point reduction as the more probable action, but they also assign about a 49% chance to a 50-basis-point cut, according to rate futures contracts.
“A much weaker report may further raise concerns about its cooling labour market,” said Christopher Wong, a currency strategist at OCBC.
“Risk-off trades may pressure high-beta FX, including AUD, NZD, KRW, while JPY, CHF and to some extent, USD can benefit.”
Asian currencies traded higher, with Thailand’s baht, the Taiwanese dollar, and South Korea’s won gaining 0.2%, 0.3%, and 0.4%, respectively.
Indonesia’s rupiah and Malaysia’s ringgit added 0.2% each.
Mixed US data has heightened concerns about economic growth in the world’s largest economy and tarnished the dollar’s allure.
The dollar index, a measure against six major peers, hovered near a one-week low after slipping about 0.2% overnight.
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