Late dollar rally hits SE Asian currencies<\/p>\n
SINGAPORE (Dow Jones): A late U.S. dollar rally against the
\nyen stripped Southeast Asian currencies of most of their gains
\nmade during Asian trading hours on Tuesday.<\/p>\n
After climbing steadily throughout the day in parallel with
\nthe Japanese currency, the ringgit, the Singapore dollar and the
\nbaht were all sold off sharply in response to the yen's afternoon
\nfall, leaving only the Singapore dollar higher on the day.<\/p>\n
\"The regional currencies took a turn for the better hinging on
\nthe rise in the yen but it wasn't sustainable,\" said the head of
\nregional currency trading at one U.S. bank in Singapore.<\/p>\n
The run-up in the regional currencies over the course of the
\nday never looked that convincing, argued traders in Singapore,
\nnoting that throughout the rally market participants were taking
\nadvantage of the U.S. dollar's weakness to build up long
\npositions in the U.S. currency, particularly against the ringgit.<\/p>\n
But leaving aside the external risk of the yen, further growth
\ndeceleration in Malaysia is going to put more pressure on banks'
\nasset quality, and the level of non-performing loans will
\ncontinue to rise.<\/p>\n
In Singapore the use of the exchange rate as a cyclical
\nresponse has always been a major policy tool in the past, so on
\neconomic grounds there are reasons to expect both currencies to
\ngo lower soon,\" Low said.<\/p>\n
Bad loans<\/p>\n
Other analysts and traders agreed with this view, although
\nmost argued that the regional currencies are unlikely to weaken
\nsubstantially in the near future while the market awaits details
\nof proposed Japanese policy actions to tackle bad loans and
\ndepressed domestic demand.<\/p>\n
\"The ringgit is going to diverge from the yen,\" said Thio Chin
\nLoo, foreign exchange strategist at Banque Paribas in Singapore.
\n\"The basic economic fundamentals are going separate ways.
\nFundamentals are a little improved in Japan, but in Malaysia the
\ngovernment's monetary policy stance remains a big uncertainty.\"
\nHowever with Bank Negara actively mopping up excess ringgit
\nliquidity from the system on Wednesday, the U.S. dollar is
\nunlikely to rebound beyond 4.20 ringgit so long as the yen
\nremains relatively firm, she said.<\/p>\n
Late in Asian trading the U.S. currency was quoted at 4.1385
\nringgit, up from a low of 4.1025 ringgit and above 4.1250 ringgit
\nlate in Asia on Tuesday.<\/p>\n
Against the Singapore dollar, the U.S. dollar was at S$1.6905,
\nup sharply from an earlier low of S$1.6785, but still below
\nS$1.6915 late the previous day.<\/p>\n
In late trading in the offshore market the U.S. dollar was
\nquoted at 42.1300 Thai baht, a touch down from 42.1550 baht the
\nday before.<\/p>\n
Among other Asian regional currencies, the rupiah, the
\nPhilippine peso and the won all ended higher in line with the
\nyen's early run up. With the domestic market closed for a holiday
\nthere was no trading in the new Taiwan dollar.<\/p>\n
Late in Asia, the U.S. dollar was at 14,650 rupiah, down from
\n14,850 the previous day.<\/p>\n
At the close of trading in Manila, the U.S. dollar was at
\n41.42 pesos, down from 41.90 pesos on Monday. The domestic market
\nwas closed on Tuesday.<\/p>\n
The U.S. currency also ended at 1,370 won, down from KRW1,373.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/late-dollar-rally-hits-se-asian-currencies-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }