Most Asian currencies advanced on Friday, while the dollar eased further as traders bet that the Federal Reserve was done with its interest rate hikes, although anticipation of key nonfarm payrolls data kept gains in check.<\/p>\n
Regional trading volumes were also somewhat muted on account of a Japanese market holiday.<\/p>\n
Rate-sensitive, risk-heavy units such as the\u00a0South Korean won<\/a><\/span>,\u00a0Philippine peso<\/a><\/span>\u00a0and the\u00a0Indonesian rupiah<\/a><\/span>\u00a0were the best performers for the day, rallying between 0.5% and 1%.<\/p>\n The\u00a0Japanese yen<\/a><\/span>\u00a0rose 0.1% in holiday-thinned trade, but still remained close to its weakest level in one year, at above 150 against the dollar. This kept traders wary of any intervention by the Japanese government in currency markets, after the Bank of Japan struck a less hawkish tone earlier this week.<\/p>\n The\u00a0Chinese yuan<\/a><\/span>\u00a0was flat, hovering around a one-year low following a string of weak economic readings this week. A private survey showed on Friday that Chinese\u00a0service sector activity<\/a><\/span>\u00a0grew less than expected in October, although it did accelerate slightly from the prior month.<\/p>\n Broader Asian currencies advanced, while the dollar nursed some losses for the week after the\u00a0Fed kept rates steady<\/a><\/span>, and offered somewhat dovish signals on more interest rate hikes.<\/p>\n This spurred increased bets that the central bank was done with its rate hikes for the year, and will begin cutting rates from mid-2024. The\u00a0dollar index<\/a><\/span>\u00a0and\u00a0dollar index futures<\/a><\/span>\u00a0fell slightly in Asian trade, and were down 0.4% for the week.<\/p>\n But the dollar still faced one more major test on Friday, with key\u00a0nonfarm payrolls<\/a><\/span>\u00a0data for October due later in the day.<\/p>\n Any signs of resilience in the labor market gives the Fed more impetus to hike interest rates, which could in turn reverse some of the dollar weakness seen this week. The Fed still left the door open for one more rate hike this year, although the move will be largely dependent on more economic data.<\/p>\n Friday\u2019s data is expected to show a sharp decline in payrolls. But the data has also consistently beaten market estimates so far in 2023, as the U.S. labor market remained strong.<\/p>\n The\u00a0Australian dollar<\/a><\/span>\u00a0fell 0.1%, but was trading up 1.5% for the week amid increasing bets that the\u00a0Reserve Bank of Australia<\/a><\/span>\u00a0(RBA) will hike interest rates when it meets this coming Tuesday.<\/p>\nDollar weak on easing rate hike fears, nonfarm payrolls in focus<\/h3>\n
Australian dollar set for strong week as RBA rate hike looms<\/h3>\n