SE Asian currencies down, skepticism marks trading<\/p>\n
SINGAPORE (Dow Jones): Southeast Asian currencies are mostly
\nlower against the U.S. dollar in late dealings yesterday amid
\nextremely volatile, jittery trading, said market players.<\/p>\n
Looking ahead, regional currencies are expected to undergo
\nvery choppy dealings next week on continued uncertainty in U.S.
\nstocks, the political fortunes of Russian president Boris Yeltsin
\nand other factors, said market players.<\/p>\n
The view taken by market players on the dollar versus the yen
\nwill largely determine the outlook of Southeast Asian currencies,
\nsaid traders. There are still no clear signs whether the dollar
\nwill break below Y140.00 on the downside or above Y145.00 on the
\nupside, they added.<\/p>\n
"Friday's dealings were very choppy...there was a lot of
\nuncertainty," said the chief regional dealer at a major U.S.
\nbank. "People are not sure how to interpret all the developments
\naround".<\/p>\n
"We're really not sure where the dollar-yen (dollar versus the
\nyen) is headed. This morning, we thought the dollar's (upward)
\ntrend against the yen was reversed. Now, we have seen a strong
\nrally in the dollar-yen," said the treasury head of a major
\nSoutheast Asian bank.<\/p>\n
The dollar fell to an intraday low of Y140.35 in early Friday
\ndealings before staging a rebound to a high of Y144.20-30. Most
\nAsian currencies tracked the movement in the yen in the initial
\ntrading.<\/p>\n
The U.S. dollar buying against the Singapore dollar was
\nlargely triggered by the entry of European market players, said
\ntraders.<\/p>\n
The U.S. dollar's break above S$1.7780 triggered some stop-
\nloss orders, forcing interbank players to cover their short
\npositions, said Derrick Lee at MCM Asia-Pacific. While some good
\ninterim support can be found around S$1.7700-50, the short term
\ntarget for the U.S. dollar is still seen at S$1.80, traders said.<\/p>\n
Resignation of the top two officials at Bank Negara, the
\ncentral bank in Malaysia, affected trading. Earlier Friday, Dow
\nJones Newswires reported that the central bank governor, Tan Sri
\nAhmad Mohamed Don, and his deputy, Fong Weng Phak, tendered their
\nresignations. There was a very strong upside bias in the dollar
\nversus the ringgit in the short term, added traders.<\/p>\n
"People are looking to buy dollar-ringgit (dollar versus the
\nringgit). There's a mood that things are going to get a lot worse
\nin the country," said a regional currencies trader at a Thai
\nbank.<\/p>\n
"The general feeling is that the market is keen on buying the
\ndollar-ringgit to 4.2700-3000 ringgit," added the trader.<\/p>\n
Similarly, the Philippine peso closed lower against the dollar
\nFriday on demand for the U.S. currency following the yen's
\nrenewed weakness, traders said.<\/p>\n
"The yen's fall caused some panic in the peso-dollar market,"
\na trader with a local bank said. Traders expect the peso to
\ncontinue to depreciate next week, possibly falling below 45 pesos
\n(PHP) to the dollar on Monday.<\/p>\n
At the close, the dollar averaged 43.874 pesos on the
\nPhilippine Dealing System, up from Thursday's average of 43.582
\npesos.<\/p>\n
In the onshore market for the Thai baht, the local currency
\nended lower in Asian spot trading Friday in a volatile market, as
\nforeign investors sold most Asian currencies to take long
\npositions on the dollar.<\/p>\n
The Thai currency was also weaker in the swap market, where
\ninvestors make agreements to buy and sell baht at fixed prices at
\nfixed times in the future. Swap premiums were higher amid dollar
\nbuying.<\/p>\n
The only Southeast Asian currency which bucked the trend
\nFriday was the Indonesian currency, which traded to a high of
\n10,900 rupiah to the dollar.<\/p>\n
"Although the rupiah managed to break 11,000, the level
\nremained a strong support for the dollar," said Pardi Kendy, the
\nhead of the treasury department of Bank Buana Indonesia.<\/p>\n
However, traders see the rupiah testing the level again next
\nweek, and expect the rupiah to trade below IDR11,000 after
\nbreaking it.<\/p>\n
Meanwhile, in North Asia, the Hong Kong dollar was a touch
\nstronger than earlier but forward foreign exchange premiums
\nsurged late in late Asian trading Friday as investors rushed to
\nhedge local currency exposure.<\/p>\n
The Hong Kong dollar, while weaker at HK$7.7490 to the U.S.
\ndollar than late Thursday's level of HK$7.7460, has strengthened
\nfrom HK$7.7499 to the dollar during most of Friday afternoon.<\/p>\n
Tight money markets forced investors to turn to the spot
\nmarket to cover their short positions. Activity was centered in
\nthe forwards market, added traders.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/se-asian-currencies-down-skepticism-marks-trading-1447893297",
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