SINGAPORE: Asian currencies were mostly weaker on Monday as the dollar steadied on signs of a tightening US jobs market but the jury is out on whether the currency’s strength will last.

The greenback held steady against a basket of six currencies after rising 0.75 percent on Friday.

The dollar climbed from 15-month lows after data showed nonfarm payrolls and wages increased in the United States in July.

The greenback was also buoyed by comments from National Economic Council director Gary Cohn that the US administration is working on a tax plan that would bring corporate profits back to the United States.

But the encouraging employment figures and tax plan prospects failed to add further momentum to the dollar as concerns turned towards the risk of still-subdued inflation.

“While the downside of US dollar might be limited by nonfarm payrolls in the short term, the fate of the greenback is still dependent on future inflation evolution,” Mizuho Bank said in a note.

“Futures-implied probability of a rate hike in December hovers at around 40 percent, as market awaits inflation releases (PPI and CPI) this week for more evidence of inflation picking up,” Mizuho Bank said.

US producer price index numbers for July will be released on Thursday and the consumer price index figures are due on Friday.

“We see contained downside potential in emerging market Asian currencies at current stage as there are no signs of imminent inflationary pressure in the US,” Scotiabank said in a note.

In Asia, the Philippine peso led the decliners, falling 0.3 percent after two straight sessions of gains. It was closely followed by the Korean won which took a hit as the dollar steadied.

In other regional currencies, the yen was little changed.

Japan’s foreign reserves edged up in July when compared to the previous month but failed to beat levels hit a year ago, data from the Ministry of Finance showed.

Taiwan’s foreign exchange reserves on the other hand rose from a year earlier and against the previous month, lifting the Taiwan dollar a touch higher.

The rupiah inched marginally lower after Indonesia’s gross domestic product (GDP) grew 5.01 percent in the quarter, slightly missing analyst estimates. A Reuters poll forecast 5.10 percent annual growth for the three months ended in June.

Annual economic growth in Southeast Asia’s largest economy has hovered around 5 percent in every quarter since early-2014, and many analysts say that pace is not enough to escape the so-called middle income trap.—Reuters