Week Ahead FX outlook:
Key FX views:
With the US government shutdown now over, markets are set to refocus on US macro data releases. In particular, the potential publication of delayed jobs data could inject volatility into global markets in the week ahead, though the publication timeline remains uncertain. Overall, market sentiment remains largely cautious with US equities softer and gold prices higher, reflecting potential investor hedging against the risk of weaker US jobs data. This backdrop leaves Asian currencies highly sensitive to swings in US rate‑cut expectations and US macro data surprises. In particular, ADP employment report showed private payrolls falling on average 11,250 jobs per week in the four weeks ended 25 October, reflecting potentially further weakening labour market conditions in the US.
In the event that delayed data are not published, markets will turn to other indicators such as the Empire Manufacturing survey and the Philadelphia Fed business outlook for guidance. These releases, while less comprehensive, will still provide important signals on US economic momentum. Notably, economic advisor Kevin Hassett has indicated that the October unemployment rate will not be available, underscoring the uncertainty around the data that could be published.
In the week ahead, the Philippine peso remains focused on remittance inflows, which could provide stability, at a time when USDPHP tests the 59.00 threshold. The Indian rupee looks vulnerable, with soft inflation likely to cement expectations of an RBI rate cut in December. Meanwhile, the Malaysian ringgit continues to outperform, supported by robust domestic growth and spillover strength from a resilient CNY. In contrast, the Indonesian rupiah will likely continue to lag peers, weighed down by net foreign bond outflows, despite Bank Indonesia potentially holding rates steady at 4.75% in the policy meeting next week.
Soft inflation likely cementing an RBI rate cut in December
