ASEAN currencies stop tracking yen<\/p>\n
SINGAPORE (Dow Jones): After weeks of mirroring the yen's
\nevery move, Southeast Asian currencies broke step with the
\nJapanese currency yesterday.<\/p>\n
Scenting a weaker monetary policy stance from the Malaysian
\ngovernment, offshore funds took the opportunity to hammer both
\nthe ringgit and the Singapore dollar lower, even as the yen
\nremained relatively stable.<\/p>\n
Both currencies fell through key support levels, with the U.S.
\ndollar rising to within a whisker of 4.20 ringgit, its highest
\nlevel since the beginning of February. Against the Singapore
\ndollar the U.S. currency rose to nearly S$1.72<\/p>\n
In response to the falls, the baht was also pushed lower
\nagainst the U.S. dollar. The rupiah and the Philippine peso,
\nhowever, both managed to claw their way higher.<\/p>\n
The foreign exchange market had been on the alert for any
\nsigns of a softening in Malaysia's monetary policy ever since it
\nwas announced last week that Daim Zainuddin, a close ally of
\nPrime Minister Mahathir Mohamad, was to be appointed to the
\ncabinet as a special minister with responsibility for economic
\ndevelopment.<\/p>\n
The move was widely seen as strengthening the hand of
\nMahathir, a vocal monetary policy dove, over that of his hawkish
\ndeputy Anwar Ibrahim.<\/p>\n
The Singapore dollar also became a target because it is more
\nliquid than other regional currencies, making it easier to trade,
\nand because lower interest rates mean it is cheaper to borrow to
\nsell short.<\/p>\n
There are good fundamental reasons to sell the Singapore
\ndollar should the ringgit weaken, however.<\/p>\n
\"The market perceives that the authorities will maintain the
\nvalue of the Singapore dollar on a trade-weighted basis. Since
\nMalaysia is Singapore's largest trading partner, if the ringgit
\nweakens, then so must the Singapore dollar,\" explained Raha at
\nCitibank.<\/p>\n
The market brushed off a batch of ex-budget economic stimulus
\nmeasures announced late Monday in parliament by finance minister
\nRichard Hu.<\/p>\n
A downward revision of the government's 1998 economic growth
\nforecast to 0.5 percent to 1.5 percent from 2.5 percent to 4.5
\npercent previously held few surprises for traders.<\/p>\n
Some market participants, however, did point to Hu's claim
\nthat the Singapore dollar had actually appreciated against a
\ntrade-weighted basket of currencies as evidence that the
\nSingapore currency has further to fall, with Brooks at Santander
\npredicting a year-end level for the U.S. dollar of S$1.85.<\/p>\n
The falls in the ringgit and the Singapore dollar also helped
\nto weaken sentiment towards the baht, already undermined by
\nministerial promises of lower short term interest rates.<\/p>\n
Late in the Asian day, the U.S. dollar was quoted at 42.3750
\nThai baht, up from 41.6050 late on Friday.<\/p>\n
The Philippine peso, however, ended higher, boosted by the
\nfirmer tone of the Japanese yen. At the end of domestic trading
\nthe U.S. dollar was quoted at 41.90 peso, down from 41.97 peso on
\nFriday.<\/p>\n
In North Asia the won also edged higher in line with the yen,
\nwith the U.S. dollar ending trading at 1,383 Korean won, compared
\nwith 1,386 won on Friday.<\/p>\n
Against the new Taiwan dollar, the U.S. currency closed at
\nNT$34.551, down fractionally from NT$34.552 after the central
\nbank sold U.S. dollar to meet quarter end importer demand.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asean-currencies-stop-tracking-yen-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}