Regional currencies recover after sharp fall in rupiah<\/p>\n
SINGAPORE (Reuters): Regional currencies recovered after an
\nearly trouncing yesterday following a sharp fall in the rupiah in
\nLondon and New York amid deep concern over the deteriorating
\nsituation in Indonesia.<\/p>\n
Riots shook the North Sumatran capital Medan for the third
\nsuccessive day on Wednesday, killing at least one people.<\/p>\n
The trouble cooled yesterday but troop convoys were moving
\nthrough the city in a show of strength.<\/p>\n
After a frightening slide to the 10,000 level the rupiah
\nrecovered some of its poise after the Indonesian central bank
\nhiked key interest rates between four and 12 percentage points.<\/p>\n
In late Asian business the rupiah had recovered to around
\n9,600 per dollar but was still nearly 9 percent down on the day.<\/p>\n
Dealers said hedge funds, which had built up long dollar
\nforward positions, were now well positioned with forward points
\nkicking up as the spot currencies came down.<\/p>\n
Some even said the funds were actively pushing spot lower in
\norder to make these forwards even more profitable.<\/p>\n
The ringgit stood out with a nasty drop to the key 4 per
\ndollar level. It recovered alongside the rupiah later, although
\nseemingly good trade data hid a massive collapse in imports.<\/p>\n
The Korean won sank around 2 percent to flirt with the 1,400
\nlevel on concerns over the regional instability but mainly
\nbecause of growing labor unrest.<\/p>\n
The Korean Confederation of Trade Unions has threatened to
\ncall a general strike late this month or early next, demanding
\nrenegotiations on the revised labor law allowing mass layoffs.<\/p>\n
\"Labor unrest has picked up following the announcements by
\nlabor leaders to stage an all-out strike in May or June and we
\ncould see strong government retaliation,\" said Thio Chin Loo,
\nstrategist at Paribas in Singapore.<\/p>\n
\"The won's base at 1,300 is firm and renewed selling activity
\nin Asian currencies and domestic concerns should see it head back
\ntowards the higher end of its 1,300 to 1,500 range fairly soon,\"
\nshe added.<\/p>\n
The Philippine peso gained some ground after a shaky start but
\ninvestors are still looking to be long dollars going into the May
\n11 presidential election.<\/p>\n
The Philippine central bank indulged in some verbal
\nintervention saying it would implement measures to defend the
\npeso if the situation warrants.<\/p>\n
But they did not say what the measures would be.<\/p>\n
The Taiwan dollar strengthened slightly following a surprise
\ntrade surplus of US$272.2 million for April. But worries about a
\ndecline in exports were confirmed with exports down 7.3 percent
\nyear-on-year, while imports fell 11.9 percent.<\/p>\n
The Thai baht strengthened to above the 40 per dollar level
\nafter sliding to a low of 40.45 earlier and the Singapore dollar
\nwas down amid concern over the problems in neighboring Indonesia.<\/p>",
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