SE Asian currencies slip as traders back away<\/p>\n
SINGAPORE (Dow Jones): Southeast Asian currencies mostly
\nslipped against the U.S. dollar during Asian trading yesterday,
\ntrailing regional stock markets lower as fears of financial
\ninstability in Russia and Latin America depressed sentiment
\ntowards emerging markets throughout the world.<\/p>\n
Liquidity in the region's foreign exchange markets remained
\nthin, however, with the falls in Southeast Asian currencies
\nattributed to U.S. dollar buying by just a handful of offshore
\nbanks, as many players stayed away from the market.<\/p>\n
Traders in Singapore spent much of the morning dissecting the
\ntext of a weekend speech by Prime Minister Goh Chok Tong in an
\nattempt to glean clues to the government's attitude towards the
\nSingapore dollar exchange rate.<\/p>\n
While Goh noted that the Singapore dollar's strength relative
\nto other regional currencies had damaged export competitiveness,
\nhe stressed that the government does not regard depreciation as a
\nsolution.<\/p>\n
\"He didn't tell us anything we didn't know already,\" said one
\ntrader of Goh's speech, in which the prime minister warned of
\ntough economic times ahead.<\/p>\n
There was also little for traders to get their teeth into in
\nthe Singapore Monetary Authority's annual report, released
\nyesterday afternoon.<\/p>\n
Although monetary authority managing director Koh Yong Guan
\nsaid that the de facto central bank is \"quite comfortable with
\nthe exchange rate as they are today, and with the trends in the
\nlast few months,\" traders were unimpressed.<\/p>\n
Many believe that the Monetary Authority of Singapore has been
\nintervening in the spot foreign exchange and money markets for
\nmonths to massage the local currency lower, in an effort to
\nreverse the erosion in export competitiveness caused by the
\ndepreciation of other regional currencies.<\/p>\n
Late on Monday the U.S. dollar was quoted at S$1.7677, up from
\nS$1.7575 late in Asia on Friday. Of the action there was, much
\ntook place in the regional currency cross-markets, according to
\ntraders.<\/p>\n
\"People are selling the Singapore dollar against the other
\nregionals,\" said the head of trading at one U.S. bank in the
\nisland republic, although he added: \"The amounts are not
\nsignificant\".<\/p>\n
Offshore players, he explained, are selling the Singapore
\ndollar short against the U.S. dollar in the forward market. At
\nthe same time they are selling U.S. dollars against the ringgit
\nand the baht in offsetting transactions, which leave them
\nbenefiting from the gaping interest rate differentials between
\nthe Singapore dollar and other regional currencies.<\/p>\n
Cross-market buying failed to buoy either the baht or the
\nringgit, however, with both finishing Asian trading hours lower
\nagainst the U.S. currency.<\/p>\n
\"Stock markets are down across the region, and the currencies
\nare playing catch up, as negative sentiment spills over,\" said
\none regional currency trader at another U.S. bank.<\/p>\n
Late in the Asian day, the U.S. dollar was quoted at 4.2225
\nringgit, up from 4.2050 ringgit towards the end of Friday's
\ntrading session.<\/p>\n
Against the Thai currency the U.S. dollar was quoted at
\n41.6950 baht, up from 41.4950 baht late on Friday.<\/p>\n
Although traders said that offers from Thai exporters are
\nlikely to cap the U.S. dollar at levels around 42.00 baht to
\n42.20 baht, they say there is a danger that sentiment towards the
\nbaht may deteriorate unless the authorities pursue banking sector
\nreform with greater vigor.<\/p>\n
Elsewhere in the region the Philippine peso also slipped, with
\nthe U.S. dollar ending trading in Manila at 43.23 pesos, up from
\n42.68 pesos at Friday's close.<\/p>\n
The rupiah bucked the regional trend however, rising against
\nthe U.S. dollar on inflows of extra assistance funds granted last
\nmonth by donor nations.<\/p>\n
Late in Asian trading, the U.S. dollar was quoted at 11,675
\nrupiah, down from 11,750 rupiah late on Friday.<\/p>\n
In North Asian markets, regional currencies also ended down,
\nwith worsening sentiment towards the region reflected by a rise
\nin Hong Kong dollar interest rates and an increase in the yuan
\ninterest rates implied by non-deliverable forward rates.<\/p>\n
Against the Korean won, the U.S. dollar ended at 1,305.75 won,
\nup from 1,300 won on Friday. Against the Taiwanese currency, the
\nU.S. dollar closed at NT$34.812, up from NT$34.695 at Friday's
\nclose.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/se-asian-currencies-slip-as-traders-back-away-1447893297",
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