SE Asian monies fall on weaker yen<\/p>\n
SINGAPORE (Dow Jones): The Philippine peso rose and the Thai
\nbaht fell in a day of otherwise quiet trading in Southeast Asian
\ncurrency markets on Tuesday.<\/p>\n
Among other regional currencies the Singapore dollar, the
\nIndonesian rupiah, the new Taiwan dollar and the South Korean won
\nall ended the session slightly lower, shadowing a fall in the
\nJapanese yen.<\/p>\n
Despite the closure of the domestic market in Bangkok for a
\nholiday, offshore trading volumes in the baht were relatively
\nheavy. Early in the Asian day strong interest to buy U.S. dollars
\nagainst the Thai currency from offshore market players pushed the
\nU.S. dollar up through the key 37.80 baht level which had capped
\nthe U.S. currency since late October 1998.<\/p>\n
According to a trader at a U.S. bank in Singapore, market
\nplayers actively went short on the baht against the U.S. dollar
\nin order to fund long positions in the Philippine peso, driving
\nthe U.S. currency to a five-month high of 37.87 baht in intraday
\ntrading.<\/p>\n
\"The trade makes sense in that Philippine interest rates,
\nalthough falling, are still above baht rates, and the Philippine
\neconomy is relatively a more positive story than Thailand,\"
\nexplained Thio Chin Loo, foreign exchange strategist at Banque
\nParibas in Singapore.<\/p>\n
Although she conceded that market sentiment had swung against
\nthe baht, because the pace of Thailand's economic recovery
\nappears slow, Thio advocated going long on the Philippine peso
\nagainst the Singapore dollar rather than against the baht.<\/p>\n
\"The funding pick-up is larger against the Singapore dollar,\"
\nshe explained.<\/p>\n
Short term funding costs for short Singapore dollar positions
\nare currently around 0.5 percent, compared with around 5.8
\npercent for the baht. The offshore peso yield implied by the rate
\non the three-month U.S. dollar\/peso non-deliverable forward is
\naround 12.5 percent.<\/p>\n
Traders are also somewhat nervous of shorting the baht too
\naggressively, fearing that Thailand's three day holiday next week
\nmay provide an opportunity for speculative players to squeeze
\nliquidity in the offshore market, driving funding costs higher.<\/p>\n
Those fears should limit the U.S. dollar's potential gains
\nagainst the Thai currency, capping the U.S. currency at around 38
\nbaht to 38.20 baht over the next few sessions, according to baht
\ntraders in the offshore market.<\/p>\n
Late Tuesday in Asia, the U.S. dollar was quoted at 37.8850
\nbaht, up from 37.6800 baht the previous day.<\/p>\n
Against the Philippine peso, the U.S. dollar ended local
\ntrading at 38.440 baht, down from 38.540 baht at Monday's close
\nand at its lowest level since mid-February.<\/p>\n
Sentiment towards the Philippine economy received a boost
\nearly Tuesday on the announcement of significantly lower-than-
\nexpected inflation data for March. The annual inflation rate
\ndipped to 8.7 percent in March, down from 9.9 percent in
\nFebruary, and well below the 9.5 percent rate the market had
\nexpected.<\/p>\n
With inflation trending downwards after hitting 11.6 percent
\nin January, most observers believe the authorities in Manila have
\nmore leeway to trim domestic interest rates.<\/p>\n
Other regional currencies fared less well on Tuesday, with the
\nSingapore dollar easing slightly as the U.S. dollar retained its
\nbuoyant form against the Japanese yen.<\/p>\n
\"The (U.S.) dollar should remain supported at S$1.7300, and I
\nthink we should see it a little higher before the end of the
\nweek,\" said a trader at a European bank in Singapore. He added
\nthat many market participants are looking for the U.S. currency
\nto retest it's six-month high of S$1.7380 hit in early March.<\/p>\n
Late Tuesday in Asia, the U.S. currency was trading at
\nS$1.7356, up a fraction from S$1.7340 late in Asian dealing the
\nprevious day.<\/p>\n
The rupiah also slipped, with the U.S, dollar rising to end
\nAsian trading at Rp 8,875, up from 8,685 rupiah the previous day.<\/p>\n
In North Asia, the won recovered most of the ground it had
\nlost after opening sharply lower to end the session only slightly
\ndown from the previous close on Friday. The Korean market was
\nclosed Monday for a holiday.<\/p>\n
After hitting an intraday high of 1,228 won at the open, the
\nU.S. dollar subsequently sank back to end local trading at 1,225
\nwon, up from 1,224.60 won on Friday.<\/p>\n
Against the New Taiwan dollar, the U.S. currency closed at
\nNT$33.135, up from NT$33.124 on Friday. The Taiwanese market was
\nalso closed Monday.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/se-asian-monies-fall-on-weaker-yen-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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