Asian currencies up but lag behind yen's ascent<\/p>\n
HONG KONG (Dow Jones): Asian currencies followed the yen
\nhigher Friday, but gains were limited by sales from market
\nplayers looking to exit long positions in the regionals against
\nthe Japanese currency.<\/p>\n
The U.S. dollar's slide against the yen during European and
\nU.S. trading hours Thursday did boost regional currencies to a
\ncertain extent.<\/p>\n
In Southeast Asia the Singapore dollar and the Thai baht
\nfinished noticeably stronger, while in North Asia both the New
\nTaiwan dollar and the South Korean won edged higher.<\/p>\n
But dealers said the regional currencies appreciated less than
\nmight have been expected, held back by the liquidation of long
\npositions established last week against the yen.<\/p>\n
\"There are people closing out long dollar\/yen positions and
\nshort dollar\/Singapore dollar, short dollar\/baht and short
\ndollar\/rupiah positions,\" said a regional currencies trader at a
\nU.S. bank in Singapore, explaining why the regional currencies
\nfailed to keep pace with the yen's climb against the U.S. dollar.<\/p>\n
But by late in Asian trading Friday, demand to buy the dollar
\nagainst the regional currencies had petered out, and the U.S.
\ncurrency slipped back.<\/p>\n
Toward the end of local hours the U.S. dollar was quoted
\nagainst the Singapore dollar at S$1.7251, down from S$1.7317 the
\nprevious day.<\/p>\n
Against the Thai baht, the U.S. dollar was at 37.0650 baht,
\ndown from 37.1100 baht late in Asia on Thursday.<\/p>\n
The recent breakdown of the long-standing correlation between
\nregional currencies and the yen has left traders with little idea
\nwhich direction markets are likely to take over the coming week.<\/p>\n
\"You can't take the yen as a guideline any more,\" complained
\none dealer, adding that market players would be closely watching
\nlocal central banks for their trading cues.<\/p>\n
\"The important thing for the authorities around the region is
\nto stabilize their currencies,\" he said. While central bankers
\nmay be prepared to tolerate moves of a couple of percentage
\npoints either side of current exchange rates, he argued that they
\nwould intervene to check any extreme fluctuations.<\/p>\n
Other dealers agreed, saying that they would be wary of
\nindirect intervention by the Monetary Authority of Singapore
\nshould the U.S. dollar fall to levels approaching S$1.7150.
\nEqually, the authority would be likely to check any rapid
\nappreciation toward S$1.7350, they added.<\/p>\n
The baht is thought likely to be similarly range-bound in
\ncoming sessions, with the U.S. dollar continuing to trade in a
\n37.05 baht to 37.15 baht.<\/p>\n
Fear of action by local monetary authorities is also expected
\nto play a significant role in other regional currency markets
\nover the coming weeks.<\/p>\n
Although dealers say market participants are becoming
\nincreasingly nervous ahead of Indonesia's parliamentary elections
\non June 7, the rupiah has remained largely stable against the
\nU.S. dollar.<\/p>\n
Any upward pressure on the U.S. currency is being contained by
\nsizable offers between Rp 8,150 and Rp 8,200, leading traders to
\nconclude that Bank Indonesia is determined to limit the dollar's
\npotential gains against the rupiah in the run-up to the poll.<\/p>\n
Late in Asian trading Friday, the dollar was quoted at Rp
\n8,125, up from Rp 8,105 late Thursday.<\/p>\n
Against the Philippine peso, the dollar is thought likely to
\nhold firm above the support at 38.000 pesos, as the market
\nspeculates that the current round of interest rate cuts may be
\nnearing its end.<\/p>\n
Without the incentive of interest rate cut-induced capital
\ngains, foreign investors will have less incentive to invest in
\nPhilippine assets, argue traders.<\/p>\n
At Friday's close, the dollar was quoted at 38.021 pesos, down
\nfrom 38.065 pesos the previous day.<\/p>\n
In North Asia, the won continued to grind higher on positive
\ntrade flows, despite dollar purchases by state-owned banks. At
\nthe local close, the U.S. currency was quoted at 1,186.20 won,
\ndown from 1,188.30 won Thursday.<\/p>\n
Against the Taiwanese currency, the U.S. dollar closed at
\nNT$32.760, down from NT$32.772 the day before, following heavy
\ncentral bank intervention to dampen market volatility.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asian-currencies-up-but-lag-behind-yens-ascent-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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