*
Rupiah hits more than 8-week low
*
Ringgit set to lose nearly 1% for the week
*
Baht to mark its worst week in five
*
Heavy sell-off seen across all equities
By Roushni Nair March 10 (Reuters) - The Indonesian rupiah and Thailand's baht led Asian currencies lower on Friday as investors braced for a U.S. jobs report that could provide cues on the size and pace of the Federal Reserve's near-term interest rate increases. The rupiah , one of the best-performing currencies this year, fell as much as 0.4% and is on track for a fifth consecutive weekly loss. The baht weakened similarly, to give up more than 1% in value this week.
Weekly jobs data released on Thursday prompted market participants to expect the Fed might be less aggressive than previously thought, which would be a negative for the dollar. However, given the uncertainty ahead of the U.S. non-farm payrolls data, investors pulled back from riskier Asian assets. The February report is due later in the day, with payrolls expected to show an increase of 205,000 after surging by 517,000 in January, according to a Reuters survey of economists. Thursday's data showed U.S. jobless claims rose last week by the most in five months, but the numbers were softer than expected.
Futures pricing now implies a 50% chance that the Fed will raise rates by 50 basis points this month, compared with a 70% probability before the data release. Foreign investors sold $1.5 billion in Asian market assets during February as China's economic growth optimism was overshadowed by concerns that the Fed funds rate will end up surging higher than expected, Khoon Goh, head of Asia research at ANZ said in a note. "We do not expect a repeat of last year's massive portfolio outflows from Asia despite some volatility in the near term, especially if Asian central banks are forced to do more due to a higher terminal Fed funds rate," Goh added.
Analysts at Westpac expect market participants to gain confidence and search for opportunities going forward helping capital flow from the U.S. dollar and into Asia, as Fed's policy is seen to take effect, reining in inflation.
In Malaysia, former Prime Minister Muhyiddin Yassin was charged with abuse of power and money laundering over projects launched under his premiership, and accusations that he said were politically motivated. The Malaysian ringgit strengthened by 0.1%, though the currency is eyeing its sixth straight week of losses.
Separately, Thailand's finance minister said Southeast Asia's second-largest economy is expected to grow by 3% to 4% this year, driven by a rebound in the vital tourism sector. Next week, the Bank of Indonesia is expected to keep the policy interest rate unchanged, while India's consumer price index for February is seen to be moderating, according to Barclays. Equity markets across Southeast Asia were a sea of red, with shares in Mumbai leading the sell-off, on track for their worst day since Feb. 22 and losing nearly 1.5% this week. Stocks in Manila , Kuala Lumpur , and Seoul slipped between 0.8% and 1.5%. Shares in China and Taiwan retreated over 1.3% each.
HIGHLIGHTS:
** Indonesian 10-year benchmark yields fall 1.9 basis points
to 7.020%
** South Korea Jan. current account logs record monthly
deficit
** Fed funds rate is projected to peak just below 5.5% by
July
Asia stock indexes and currencies at 0648 GMT
COUNTRY FX RIC FX FX INDEX STOCKS STOCKS
DAILY % YTD % DAILY YTD %
%
Japan -0.47 -4.15 1.67 9.44
China <CNY=CFXS -0.05 -0.95 -1.12 4.86
>
India -0.09 +0.82 -1.05 -3.87
Indonesi -0.26 +0.68 -0.49 -1.23
a
Malaysia +0.07 -2.57 -0.92 -3.97
Philippi +0.03 +0.93 -0.92 -0.28
nes
S.Korea <KRW=KFTC -0.15 -4.51 -1.01 7.07
>
Singapor -0.16 -1.14 -1.13 -2.25
e
Taiwan -0.25 -0.58 -1.55 9.82
Thailand -0.20 -1.43 -0.52 -3.77
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic: World FX rates Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Roushni Nair in Bengaluru; editing by Eileen
Soreng)
