Asian currencies posted modest gains on Monday as the dollar steadied after surging Friday on stronger U.S. jobs data, while markets awaited American inflation figures for clues on Federal Reserve policy.
The US Dollar Index fell 0.1% to 102.181 by 04:16 GMT, reversing some of Friday's 0.7% jump, the index's largest one-day advance in five months. U.S. employers added 165,000 jobs in October, more than double economists' expectations, and the unemployment rate fell to 4.1% from 4.2%.
Markets now price in nearly an 80% probability of a 25-basis-point Fed rate increase at December's meeting, up from around 71% a week earlier, according to CME FedWatch data. U.S. consumer price figures due Tuesday could further strengthen expectations for tighter monetary policy.
In Asia, the South Korean won led regional gains. The USD/KRW pair dropped 0.7%. The Japanese yen's USD/JPY pair edged down 0.2%. The Australian dollar's AUD/USD pair rose 0.3%. The Singapore dollar's USD/SGD pair ticked 0.1% lower. The Indian rupee's USD/INR traded unchanged. The Chinese yuan's onshore USD/CNY and offshore USD/CNH pairs traded largely flat.
China's factory-gate inflation accelerated to its fastest pace in more than four years in October. The producer price index rose 5.7% year on year, accelerating from September's 5.0% and beating expectations for 5.3%. The consumer price index rose 0.7%, easing from 0.9% in September and missing forecasts for 0.8%. Capital Economics analysts said they expected producer prices to return to deflation and consumer inflation to average just 0.4% in 2027, as external price shocks fade next year.
Investors monitoring USD/KRW, USD/JPY, AUD/USD, the US Dollar Index, and USD/CNY should watch Tuesday's U.S. CPI data for signals on Fed rate expectations.