Asian currencies to consolidate soon<\/p>\n
SINGAPORE (AFP): Asian currencies face consolidation in the
\nweek ahead as markets seek justification for the strengthening of
\nregional units against the greenback, analysts say.<\/p>\n
They say the consolidation will be evident in the Indonesian
\nrupiah, which rallied last week to a nine-month high and briefly
\nbreached the 7,000-to-the-dollar level.<\/p>\n
\"We don't think the rupiah is sustainable above 7,000. If we
\nlook at the balance of payments outlook exports are still down,
\nand there are still debt repayments to be made, so there will be
\nthose who will want to buy dollars,\" said Thio Chin Loo, currency
\nstrategist at Banque Paribas here.<\/p>\n
Thio favored a return of the rupiah to 9,000 levels. The
\nIndonesian unit ended Friday at 7,775 to the US dollar from 8,325
\nthe previous week.<\/p>\n
Some dealers however expect a rise in the rupiah, as billions
\nof dollars from the International Monetary Fund (IMF) to
\nIndonesia are converted into rupiah. They note remarks by Bank
\nIndonesia governor Sjahril Sabirin that the rupiah could
\nstrengthen to 6,000 and that Indonesian exports will remain
\ncompetitive.<\/p>\n
Liquidity, following a global move towards lower interest
\nrates, rather than economic fundamentals, was driving trade in
\nthe regional currencies, said Thio.<\/p>\n
\"At these levels, the currencies have bottomed out. There's no
\nbig rally in sight and we think they will remain rangebound,\" she
\nsaid.<\/p>\n
The Thai baht held its ground and closed last week at 37.65,
\nup slightly from its close the previous week of 37.84 to the
\ndollar.<\/p>\n
Dealers said profit-taking in the baht was tempered by
\ninvestors buying it back for hedging purposes and checks by the
\ncentral Bank of Thailand to curb any further appreciation of the
\ncurrency.<\/p>\n
The Singapore dollar fell to 1.6273 to the US dollar from
\n1.6198 a week earlier. Its movement was partly influenced by the
\nJapanese yen, which came off its gains to close last week at
\n119.20 from 114-levels.<\/p>\n
Foreign inflows boosted the Philippine peso which rose to a
\nthree-month high of 42.05, while central bank intervention to
\nslow the Taiwan dollar's appreciation saw it steady through the
\nweek to end at 32.898. The South Korean won gained to close at
\n1,316 to the dollar.<\/p>\n
Markets welcomed the decision of major Japanese banks to seek
\nan infusion of capital from public funds. But some warned of
\nincreasing deflation in Japan despite its strategy to save its
\nailing banks.<\/p>\n
\"The strong yen has exacerbated deflation in Japan, making it
\nharder for Japan to get out of the current downward spiral of
\ncontracting credit, declining consumption, falling wages and
\nplunging industrial production,\" said Christopher Wood of
\nSantander Investment Securities Asia in a commentary.<\/p>\n
\"The longer Japan takes to recover, the less hope the rest of
\nAsia has for a revival in Japanese demand,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asian-currencies-to-consolidate-soon-1447893297",
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