Asian currencies forecast to maintain recovery path<\/p>\n
SINGAPORE (AFP): Asia's troubled currencies are expected to
\nmaintain their recovery against the U.S. dollar this week as
\nIndonesia and the International Monetary Fund (IMF) appear close
\nto signing their third pact to put the shattered economy on its
\nfeet.<\/p>\n
\"Range-bound trading is expected but downside is not likely to
\nbe seen,\" said Jacqueline Ong, regional economist with London-
\nbased financial house IDEA.<\/p>\n
She said the Indonesian rupiah could move within a range of
\n8,000 to 8,500 against the U.S. dollar amid expectations that the
\nIMF would free up the second tranche of aid money to be delivered
\nunder a global bailout package of some US$40 billion.<\/p>\n
The tranche was delayed because of Indonesia's failure to
\nstick to a tough reform program demanded by the IMF, which has
\nbeen negotiating with Jakarta for the past two weeks on a third
\nletter of intent after two previous pacts collapsed.<\/p>\n
Sani Hamid, emerging markets analyst with Standard and Poor's
\nMMS, said an agreement between the IMF and Jakarta could be
\nreached this week.<\/p>\n
He said U.S. dollar-yen play could also dictate the movements
\nof the regional currencies amid market speculation that Japan's
\ncentral bank could intervene to stem further decline of its
\ncurrency.<\/p>\n
Among the bruised regional units, the rupiah was the biggest
\ngainer against the U.S. dollar last week -- chalking up a 9.3
\npercent gain to end at 8, 525 on Friday on the back of a 10.9
\npercent rise the previous week.<\/p>\n
The South Korean won, boosted by a flow of foreign capital
\ninto the economy and growing foreign reserves, rose 4.7 percent
\nagainst the greenback last week to 1,377 after a five per cent
\njump last week.<\/p>\n
The Malaysian ringgit and the Thai baht also rose 2.2 percent
\neach against the dollar to 3.5850 and 38.55 respectively after a
\nsuccessful run the previous week.<\/p>\n
Dealers said the ringgit could trade around a range of 3.5500
\nto 3.5800 if there were no negative news on the closely-watched
\nbanking sector while the 37 level remained a near term resistance
\nfor the baht.<\/p>\n
ANZ Investment Bank's Asian markets research arm has advised
\nclients to accumulate long rupiah positions at 8,500 or higher
\nand seek profit targets at 7,000-7,500 levels and target stop
\nlosses at 9,500-10,000.<\/p>\n
\"Advocate staying long on IDR (rupiah), given the firmer
\ninterest rate outlook and a probable breakthrough in corporate
\ndebt rescheduling,\" it said in a bulletin to clients.<\/p>\n
The IMF is still discussing various foreign debt rescheduling
\nproposals by Indonesia, whose interest rates surged last week --
\nresulting in attraction of capital into the domestic banking
\nsystem for the first time in six months.<\/p>\n
ANZ Investment Bank said that if the Indonesian situation
\nimproved, the Singapore dollar, which ended the week below 1.6000
\nagainst the U.S. dollar for the first time in four months, could
\ntest the pivotal 1.5500.<\/p>\n
\"We expect a probable intra-day breach of 1.55 if IDR were to
\nstrengthen to 7,000 plus,\" it said.<\/p>\n
Ong of IDEA said she expected the Singapore authorities to
\nprevent any rapid rise of the Singapore dollar to maintain its
\ncompetitiveness in the region. It was rumored early last week
\nthat the Monetary Authority of Singapore intervened to cap the
\nSingapore unit at 1.6000.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asian-currencies-forecast-to-maintain-recovery-path-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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