US dollar steady against emerging market currencies
The U.S. dollar faced selling pressure against major currencies but strengthened against most of its Asia-Pacific peers Monday as concerns over emerging economies remained strong despite an expected delay in Washington’s rate hike.
The U.S. unit edged up to 119.97 yen in Tokyo afternoon trade from 119.92 in New York late Friday but still down from 120.05 in Tokyo earlier that day.
The euro rose to US$1.1235 and 134.78 yen in Tokyo from US$1.1219 and 134.53 yen in U.S. trade.
“(U.S.) dollar-selling sentiment is growing against major currencies after the job reports,” Minori Uchida, head of Tokyo global markets research at Bank of Tokyo-Mitsubishi UFJ, told AFP.
The U.S. Labor Department’s September report showed stalling job growth in the past two months, stagnating wages, and the participation rate falling to a 38-year low, dampening the likelihood of a rate hike by the U.S. Federal Reserve in October.
“The Fed is extremely unlikely to begin policy normalization as soon as this month and December is looking tenuous too,” Philip Borkin, a senior economist in Auckland at ANZ Bank, said in a client note, according to Bloomberg News.
Calls on the Fed to raise interest rates were putting renewed pressure on emerging economies as investors withdraw their cash to seek better returns in the U.S.
But Tokyo-Mitsubishi’s Uchida said: “The (U.S.) dollar should not be so weak against Asian currencies as players still can’t see many encouraging factors to support the regional currencies right now.”
In Tokyo afternoon trade, the Singapore dollar fell by 0.03 percent from Friday against the U.S. unit and the South Korean won slipped 0.69 percent. The Indian rupee declined 0.30 percent and the Indonesian rupiah edged down 0.60 percent while the Thai baht was flat.