Most Asian currencies fall

Most emerging Asian currencies eased on Friday and were on course for weekly losses as investors grew cautious ahead of US jobs data that might yield clues on the likelihood of the Federal Reserve raising interest rates this month. The Malaysian ringgit weakened most, as a political scandal continued to fray investor confidence in the wake of large-scale anti-government demonstrations last weekend. Foreign exchange reserves data due to be released later in the day may reveal the extent of the pressures on Asia's worst-performing currency so far this year.
Otherwise, markets everywhere were focused on August US nonfarm payrolls data later in the day. A solid number could ease worries about sluggish global growth, and support risk sentiment, though at the same time it would reinforce expectations tha the Fed will move soon, which would hurt risk assets including emerging Asian currencies. Prospects of the Fed's September lift-off eased on the recent turmoil sparked in global markets by China's tumbling stocks and fears of hard landing in the world's second-largest economy.
Some economists said the US central bank will need to see much stronger jobs numbers if it is to raise rates this month for the first time since 2006. Economists polled by Reuters expect the US economy created 220,000 new non-farm jobs last month, while average hourly earnings are predicted to have risen by a modest 0.2 percent as they did in July. Regardless of the timing of US tightening, emerging Asian currencies are likely to stay weak, analysts said. "Given continuing China concerns, volatile commodity prices and capital outflows, any respite for EM assets looks decidedly fragile and any benefit from a delay in Fed hikes is likely to be limited," Barclays' analysts said in a note.
China's economic data in coming weeks may indicate a further slowdown with export and import numbers due on Tuesday likely continue to shrink. China is the largest trading partner to most emerging Asian countries. The ringgit led weekly losses among regional units with a 1.6 percent slide against the dollar so far this week, Thomson Reuters data showed. Malaysia's central bank will announce international reserves as of end-August at 1000 GMT. The reserves fell to $94.5 billion as of August 14, the lowest since September 2009, the central bank showed last month.
In August, the ringgit lost 9 percent, more than a half of this year's depreciation. "We expect August to have ended with a big outflow of reserves," ING said. Bank Negara Malaysia was spotted intervening to stem the ringgit's weakness as confidence shrank partially due to a corruption scandal swirling round Prime Minister Najib Razak and indebted state fund 1Malaysia Development Berhad.
The South Korean won has slid 1.5 percent throughout this week as foreign investors kept selling Seoul shares. The currency came under further pressure from expectations of rising dollar demand linked to corporate merger deals. CJ Korea Express Corp, South Korea's largest logistics company, said it is in final talks to acquire China's Rokin Logistics, submitting a bid of a little above 500 billion won ($419.4 million).
Tesco has picked Seoul-based private equity firm MBK Partners as preferred bidder to buy its South Korean unit for as much as $6.6 billion, sources said. Indonesia's rupiah has fallen 1.5 percent so far this week as falling commodity prices boosted concerns over the economic fundamentals of the major exporter of coal and crude palm oil. The Singapore dollar has slid 0.6 percent for the week, while the Indian rupee has eased 0.3 percent. By contrast, the Chinese yuan gained 0.5 percent in the holiday-shortened week on the central bank's efforts to stabilise the currency after its devaluation on August 11.