SE Asian currencies trail the yen's rise<\/p>\n
SINGAPORE (Dow Jones): Southeast Asian currencies faithfully
\ntrailed the yen higher as the Japanese currency rose against the
\nU.S. dollar during Asian trading hours yesterday.<\/p>\n
The yen dropped past 146 to the dollar before rebounding later
\nto 144\/145 in late trade.<\/p>\n
With commercial customers and investors largely absent from
\nthe foreign exchange market, trading was confined almost entirely
\nto the interbank market and dominated by short-term swings in
\nsentiment towards the yen, according to dealers.<\/p>\n
As Japanese threats of intervention caused interbank traders
\nto bail out of their long dollar positions against the yen, they
\nalso pared back their outstanding positions against Southeast
\nAsian currencies, boosting the Singapore dollar, the ringgit and
\nthe baht.<\/p>\n
The rising yen also helped push the won higher, while
\ndiminishing demand for U.S. dollars supported the rupiah. The new
\nTaiwan dollar slipped, however, despite sales of U.S. dollars by
\nthe central bank, while the Philippine peso also eased to close
\nlower.<\/p>\n
The yen is set to remain the principal driving force for
\nregional markets in the near future, say traders. But even
\nwithout yesterday's rally in the Japanese currency there would
\nhave been little incentive to sell Southeast Asian currencies,
\ndespite the underlying weakness in the region's economies.<\/p>\n
Even in Malaysia, where the market widely expects further
\neasing of monetary policy to follow last week's 50-basis-point
\ninterest rate cut, the ringgit is showing unforeseen resilience.<\/p>\n
Late in Asian trading, the U.S. dollar was trading at 4.1510
\nringgit, down from 4.1675 ringgit a day beforehand.<\/p>\n
\"Malaysia is testing the water for more interest rate cuts.
\nI'm surprised that the ringgit has not weakened further,\" said
\nNeil Saker, regional economist at SG Securities in Singapore.<\/p>\n
\"The short-term speculative interest to short the ringgit
\nsimply isn't there,\" explained a regional currency trader at a
\nGerman bank in Singapore. \"It is only the interbank players
\ncontributing to the market's liquidity, and they are just
\nfollowing the yen.\"<\/p>\n
Even if the Malaysian authorities do pursue further monetary
\neasing, it does not necessarily follow that the ringgit will
\ndrop, says Fong Cheng Hong, regional economist at Nomura
\nSingapore.<\/p>\n
\"Any foreign capital that was going to leave Malaysia left
\nlong ago, meanwhile the government is doing a good job of
\nmobilizing nationalist sentiments to contain leakage of domestic
\ncapital,\" she said.<\/p>\n
In fact, at this stage of the economic crisis easing monetary
\npolicy may even boost the ringgit, argues Fong, as foreign direct
\ninvestment flows into Malaysia to capitalize on the economic
\ngrowth opportunities created by lower interest rates.<\/p>\n
\"I praise Malaysia for taking these steps,\" she said. \"Of
\ncourse uncontrollably printing money would be disastrous for the
\nringgit, but at this stage in the economic downturn there is room
\nfor prudent easing.\"<\/p>\n
The Singapore dollar also benefited from the yen's strength,
\nwith the U.S. dollar dropping to S$1.7251 late in Asia, down from
\nS$1.7333 late the previous day.<\/p>\n
\"Everything is trading on the dollar\/yen,\" said one dealer at
\na U.S. bank in Singapore, as the baht also rose, boosted by
\ngenuine investment inflows into Thailand as well as the yen
\nrally, according to traders.<\/p>\n
Late in the Asian day, the U.S. dollar was quoted at 40.7250
\nbaht, down from 40.8850 late on Monday.<\/p>\n
\"For now we are seeing no demand to buy U.S. dollars. The
\npledges of extra aid money are helping the dollar to come off,\"
\nsaid a regional currency trader at a Dutch bank in Singapore.<\/p>\n
Elsewhere in Asia, the won strengthened a touch, helped by the
\nyen rebound, but the new Taiwan dollar and the Philippine peso
\nboth fell back.<\/p>\n
At the close of domestic trading in Seoul, the U.S. dollar was
\nquoted at 1,240.50 won, down from 1,242.50 won at Monday's close.<\/p>\n
Against the New Taiwan dollar, the U.S. currency rose on
\nstrong local demand despite sales of around $50 million by the
\ncentral bank. At the close of domestic trading, the U.S. dollar
\nwas at NT$34.427, up from NT$34.419 at the previous close.<\/p>\n
On the Philippine Dealing System, the U.S. dollar finished at
\n42.155 pesos, up from 42.140 pesos at the end of Monday's
\nsession.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/se-asian-currencies-trail-the-yens-rise-1447893297",
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