Asian monies plunge against dollar amid market worries<\/p>\n
SINGAPORE (Dow Jones): Southeast Asian currencies were well
\ndown against the U.S. dollar in late trading Wednesday, as the
\nmarket grappled with the double-barreled news of the Bank of
\nJapan's multi-billion dollar market intervention Tuesday to prop
\nup the U.S. dollar and Brazil's imploding economic woes.<\/p>\n
In Tokyo, the dollar was quoted at 111.53-57 yen, down from
\n112.53-55 yen in mid-morning trade and 112.38 yen in New York
\nlate Tuesday.<\/p>\n
\"The intervention of the Bank of Japan to slow the speed of
\nthe U.S. dollar's descent against the yen may have put a
\ntemporary floor for the dollar at Y110... Whether this turns out
\nto be a cyclical bottom remains doubtful,\" said Thio Chin Loo,
\ncurrency strategist at Banque Paribas in Singapore.<\/p>\n
In late trading, the U.S. dollar was trading at S$1.6855, well
\nup from S$1.6791 late Tuesday, in the aftermath of Tuesday's yen
\nsurge by the U.S. dollar.<\/p>\n
\"The currency has been used for a number of long trades on
\nother regionals, but it's not unexpected that with the Japanese
\nauthorities stepping in to provide a floor for the U.S. dollar
\nthat these funding trades would lighten up a bit,\" said Clifford
\nTan, an economist at Warburg Dillon Read in Singapore. \"I think
\nthe (Singapore) government would be happy to see the U.S. dollar
\nat S$1.70, then take a fresh look at economic developments in the
\nfirst half of 1999.\"<\/p>\n
Other economists are also looking for a substantial
\ndepreciation in the Singapore dollar, given the recessionary
\npressure on the economy at the moment. The government's cost-
\ncutting measures announced late last year will effectively close
\nthe gap between wage earnings and productivity, a treasury
\neconomist at a UK bank said, but that will simply fuel the
\ndeflationary pressures now seen in the republic.<\/p>\n
The U.S. dollar was also trading at 36.9550 baht, up from
\n36.3750. \"As with the rupiah and Singapore dollar, investors are
\ncovering short swap positions, which tends to push the spot
\nmarket rate down (against the U.S. dollar),\" said a trader at a
\nJapanese bank in Singapore.<\/p>\n
The U.S. dollar also climbed on fears that the Bank of
\nThailand would actively buy dollars to continue to pay off
\nforward obligations, as well as on signs that interest rates will
\nfall further after the Krung Thai Bank's 50 basis point lending
\nrate cut took effect today.<\/p>\n
\"Thailand's repayment of foreign debt progressed as the state-
\nrun Financial Sector Restructuring Agency signed contracts
\nTuesday to sell some 156 baht billion of business loans stripped
\nfrom 56 defunct finance firms with seven institutional
\ninvestors,\" a treasury economist at Standard Chartered Bank said.<\/p>\n
The U.S. dollar was also trading at 38.550 pesos, up from
\n37.925 pesos late Tuesday. Traders and economists said the
\ncountry's relatively small economy has once again been buffeted
\nby events in the region.<\/p>\n
\"It's not surprising that the peso is somewhat directionless
\nat the moment; if the dollar falls back towards Y108 tomorrow, it
\ncould well move higher,\" said a trader at a UK bank.<\/p>\n
\"The peso has been benefiting these past six months from U.S.
\ndollar weakness; if the U.S. dollar strengthens, as we expect it
\nto do later this year, then the peso could be heading lower,\"
\nsaid O'Donoghue.<\/p>\n
The government's announcement today that the country's PHP52.7
\nbillion budget deficit exceeds the ceiling of 49 billion pesos
\nset by the IMF also helped push the peso down, traders said.<\/p>\n
In North Asia, the U.S. dollar was trading at 1,172.6 won,
\ndown slightly from 1,173.3 won Tuesday. The U.S. currency was
\nalso at 32.212 New Taiwan dollars (NT), up a touch from NT32.189
\nyesterday.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asian-monies-plunge-against-dollar-amid-market-worries-1447893297",
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