SINGAPORE: Asian currencies further recouped losses on Friday, led by the South Korean won, even as the US dollar held firm against major currencies and expectations of a strong US jobs report pushed up regional stock markets.
Steadier oil prices, which crept up a bit more from 5-1/2-year lows hit on Wednesday, also put a floor under the currencies of oil exporting countries such as Indonesia and Malaysia, as did the already heavy bullish dollar positioning in markets.
Friday's US jobs report is expected to show nonfarm payrolls gained over 200,000 for an 11th straight month in December, which would be the longest stretch since 1994.
The Indonesian rupiah was among the top gainers, rising 0.4 percent after the finance ministry released details of the strong response for the country's global bond offering.
That raised $4 billion at yields substantially lower than its issue a year ago and the bonds drew bids for $19.3 billion, the largest-ever combined order book for Indonesian sovereign bonds.
WON
South Korea's won was supported not just by positive expectations for US payrolls data but also the stability in oil prices.
Korea's stock market(KOSPI) was set for a third straight session of gains, while the local currency firmed for a second day, rising to 1,093.1.
Investors were, however, wary of pushing the won firmer, fearing government intervention if the currency strengthened too fast, particularly against the Japanese yen.
One foreign exchange dealer in Seoul said some dollar-buying smoothing operations by authorities were suspected in early trade, although that could not be confirmed.
"Offshore players are selling dollars while the market seems to be betting more towards a stronger won as some views for an interest rate cut have backed off on recent positive economic forecasts," said another Seoul-based bank dealer.
South Korea's finance minister and central bank governor both said earlier this week that the economy will benefit from lower oil prices this year.
YUAN
China's yuan edged higher after the central bank fixed the daily midpoint slightly stronger, though data showing soft inflation pressures kept gains in check.
China's annual consumer inflation hovered at a near five-year low of 1.5 percent in December, signalling persistent weakness in the economy but giving policymakers more room to ease policy to support growth.
The People's Bank of China set the midpoint rate at 6.1296 per dollar prior to market open, firmer than the previous fix 6.1302.
Spot yuan was changing hands at 6.2065 in late morning trade, 1.25 percent away from the midpoint. The spot rate is allowed to trade with a range 2 percent above or below the official fixing on any given day.
The offshore yuan was trading just a shade weaker than onshore spot at 6.2096 per dollar.
Offshore one-year non-deliverage forwards contracts (NDFs) , considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 6.316.
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