SE Asian monies defy recent trading patterns<\/p>\n
SINGAPORE (Dow Jones): Currencies in Southeast Asia defied
\nrecent trading patterns during Asian hours on Wednesday, as the
\nbaht and the Singapore dollar strengthened despite a sharp fall
\nin Japanese yen.<\/p>\n
Regional currencies elsewhere in Asia failed to buck the yen's
\ntrend, however, as the Philippine peso, South Korean won and New
\nTaiwan dollar all lost ground against the U.S. dollar.<\/p>\n
The Indonesian rupiah ended little changed, affected by
\nneither the fall of the yen nor the announcement from Paris that
\nthe Indonesian government had struck a deal with its creditors to
\nreschedule US$4.2 billion of sovereign debt.<\/p>\n
Overall, regional foreign exchange volumes remained paper
\nthin, with little trading interest seen.<\/p>\n
Lack of interest kept the Singapore dollar tightly range-
\nbound, with the local currency strengthening slightly against the
\nU.S. dollar despite the U.S. currency's rally above Y136. Late in
\nAsian dealing the U.S. dollar was quoted at S$1.7289, down from
\nS$1.7350 the day before.<\/p>\n
Traders in Singapore were divided over the reason behind the
\nlocal dollar's unexpected strength. Some attributed its buoyancy
\nto market players buying the currency in the cross market against
\nthe yen to close out existing short Singapore dollar\/long yen
\npositions dating from the yen's rally earlier in the month.<\/p>\n
The baht also rose Wednesday, with one trader at a Thai bank
\ncrediting the rally to the absence from the market of holidaying
\nJapanese investors.<\/p>\n
Late in Asian trading, the U.S. dollar was quoted at 40.4900
\nbaht, down from 40.6550 baht late Tuesday.<\/p>\n
After falling in recent days, the won (KRW) weakened further
\nduring Wednesday's session, with the U.S. dollar closing above
\nthe key psychological barrier of 1,400 won, as banks and
\ncorporations continued to chase U.S. dollars to meet impending
\ndebt repayments.<\/p>\n
At the close of domestic trading in Seoul, the U.S. dollar was
\nquoted at 1,402.50 won, up from 1,400 won at the previous close.<\/p>\n
Slip<\/p>\n
Undermined by the weakening yen, the New Taiwan dollar also
\nslipped, with the U.S. dollar rising to close at NT$34.638, up
\nfrom NT$34.572 the day before.<\/p>\n
The Philippine peso, too, dropped against the U.S. dollar as
\nthe plight of Philippine Airlines continued to exact a heavy toll
\nin the foreign exchange market. By the close of dealing on
\nWednesday, the peso had fallen nearly 2 percent against the U.S.
\ndollar from its level in the previous week, before management
\nfirst proposed winding up the stricken carrier.<\/p>\n
"There is no firm support for the peso," said one analyst,
\nciting market fears that the collapse of the national airline
\nwill have repercussions on the balance sheet strength of
\nPhilippine banks.<\/p>\n
At the close of trading on the Philippine Dealing System, the
\nU.S. dollar was quoted at 44.590 peso, up from 44.375 peso the
\nprevious day.<\/p>\n
Despite falls elsewhere in the region, the rupiah was barely
\nchanged on Wednesday, although analysts hesitated to attribute
\nthe currency's stability to the debt restructuring deal hammered
\nout in Paris.<\/p>\n
"This won't affect flows," said David Fernandez, regional
\neconomist at J.P. Morgan in Singapore. "The market wasn't
\nexpecting any significant flow of funds out of Indonesia anyway,
\nand the debt rescheduling merely makes those expectations more
\nconcrete."<\/p>\n
Although inflows of assistance funding from supranational
\nagencies and bilateral donors are supporting the rupiah, the
\nmarket will continue to place a political risk premium on the
\nIndonesian currency that is likely to keep the dollar trading
\nabove 10,000 rupiah, said Fernandez.<\/p>\n
And while the Indonesian authorities have strenuously denied
\nthat they plan to introduce capital controls, few market players
\nare tempted to buy the rupiah for the handsome yields it offers,
\nlest they are caught long.<\/p>\n
"For those who don't see Bank Indonesia imposing capital
\ncontrols, going long the rupiah is a good play," said another
\nanalyst. "A lot of people were doing it, but they have stayed
\naway ever since the rumors of capital controls began to
\ncirculate."<\/p>\n
"Yields of 65 percent may look like an attractive opportunity
\nto some people, but in reality the constant concern of political
\nuncertainty will keep this market thin," agreed Fernandez at J.P.
\nMorgan.<\/p>\n
Late in Asian trading, the U.S. dollar was trading at 11,100
\nrupiah, up just a fraction from 11,088 rupiah late Tuesday.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/se-asian-monies-defy-recent-trading-patterns-1447893297",
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