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Most Asian currencies and stock markets rose on Friday as the US Senate passed legislation suspending the government’s $31.4 trillion debt ceiling, averting what would have been a first-ever default.

If the bill had failed to pass, it could have plunged the world’s largest economy into a recession and triggered a rout in financial markets globally.

In Asia, the South Korean won firmed the most, rising as much as 1.2% to its highest since mid-April.

The Asian trade bellwether’s inflation cooled for the fourth straight month, in line with market expectations, even as its central bank said that the outlook for price pressures is highly uncertain.

“While headline inflation has been softening, we believe the pace of core inflation will depend on price mark ups into the summer,” analysts from Barclays said in a research note.

They further noted the risk of the South Korean central bank remaining hawkish as core inflation remained sticky.

Other regional currencies such as the Malaysian ringgit, the Thai baht, the Taiwan dollar and the Philippines peso also were on the front foot, appreciating in the range of 0.2% and 0.5%.

Investors will now look to the US non-farm payrolls report later in the global day to get an idea on how the U.S central bank could move forward in terms of rate hikes.

Markets have largely pared back their expectations for a 25 basis point hike this month to a 20% chance, as compared to steep 50% in the previous week.

Asian currencies edge up after softer US inflation

However, analysts from Barclays believe that strong data from the US could point to another hike at the June meeting.

“In the near term, risks are from a sufficiently strong May employment report that boosts the likelihood of a hike on 15 June, hurting emerging market sentiment,” Barclays analysts wrote.

Local market participants will also look out for inflation prints from countries such as Indonesia, China and Thailand, for further clues on their respective central banks’ next moves.

The Bank of Thailand raised its key rates earlier this week by 25 basis for a sixth consecutive meeting.

Separately, the Turkish lira was down about 0.2%, with markets awaiting more about President Tayyip Erdogan’s new cabinet.

Markets in Indonesia were closed for public holidays.

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