MOSCOW, November 10 (Sputnik) – The dollar was down against most Asian currencies Monday on weaker-than-expected US job market data after having hit a seven-year high Friday on the wave of Japan’s unprecedented monetary easing.
In Tokyo trading today the dollar slid to 114.24 yen as compared to Friday’s record high of 115.39 yen, according to MarketWatch. The dollar weakened as the US non-farming sector added only 214,000 jobs in October, while experts had forecasted a growth of 231,000 to 233,000, which means the US Federal Reserve will not hurry to raise interest rates.
The MSCI Emerging Markets Index added 1.2% after a six-day decline, according to Bloomberg data. Tokyo stocks retreated as Nikkei slumped 0.59%, which triggered traders to sell the dollar, who wanted to stop losses caused by the shares retreat. However, Japanese importers started buying the slightly depreciated dollar, contributing to the stabilization of the American currency.
“There may be further fall-off, but I think firm buy orders are likely once the dollar falls to the upper half of ¥113,” an anonymous dealer at one of Japan’s commercial banks said as quoted by Marketwatch.
Mainland China’s Shang Hai Composite Index rose 2.3% to its highest since November 2011, and Hong Kong’s Hang Seng increased by 0.8%, as on November 17 these financials hubs start trading 23.5 bn renminbi (yuan) daily, which is equivalent to $3.8 bn in international FX purchases. This is the first practical move made by Beijing toward the internationalization of China’s national currency, which could see a free-float regime implemented sometime in future.
Concurrently, China’s exports increased and imports shrank in October as evidenced by data obtained over the weekend. China’s inflation in October halted at 1.6%, well below the government’s target of 3.5%, which means the mainland is lacking growth factors and the economy is set to cool further.
India’s rupee also gained against the dollar with the release of US unemployment data, which weakened the dollar on the domestic FX market. Lower oil prices, which India heavily imports, also helped ease pressure against the rupee.
“Dollar weakness after the payroll data is getting reflected in Asian currencies, including the rupee,” Anish Vyas of Mumbai-based Angel Broking said as quoted by Bloomberg. “The rupee is also aided by the prospect of inflation coming down further on the back of easing crude prices.”
The South Korean won also grew against the dollar due to US unemployment data, Yonhap reports. “The unexpected weakness in U.S. data triggered a correction in the greenback and the dollar-won rate,” Son Eun-jeong of Seoul-based Woori Futures said.
The dollar would have been supported in case there was any indication that the Fed might hike interest rate sooner than mid-2015, as such information would bolster speculative demand for the currency. However, considering the rather calm situation in the markets, the dollar’s FX rate was only corrected locally by domestic factors.