SE Asian monies firmer as funds flow back<\/p>\n
SINGAPORE (Dow Jones): Southeast Asian currencies were
\nstronger against the U.S. dollar in late trading Thursday, as a
\ngroundswell of positive sentiment over Japan's ongoing efforts to
\nfix its ailing economy pushed funds back into the region, traders
\nand economists said.<\/p>\n
\"The improvement of sentiment towards Japan has relieved the
\npressure on regional currencies,\" said Kate O'Donoghue, regional
\neconomist at Barclays Capital. \"The regional central banks will
\ntake this opportunity to build up their foreign reserves so we
\nprobably won't see currencies strengthen dramatically.\"<\/p>\n
Despite the sudden appreciation of the yen against the U.S
\ndollar to 118.55 and signs that multi-billion yen packages will
\nbe dropped on the region as well as Japan's embattled banking
\nsystem, economists expect the U.S. dollar to gradually strengthen
\nto around Y130 by the end of the year.<\/p>\n
\"There no signs yet that Japan has bottomed out. The yen will
\nweaken but when it does, we will see a minimal weakening of other
\nAsian currencies,\" said Fong Cheng Hong, head of emerging market
\nresearch at Nomura Singapore.<\/p>\n
Countries such as Thailand, Singapore and the Philippines are
\nset to reap the benefits of capital inflows, \"because investors
\nare feeling much more comfortable with Asia's markets,\" said one
\neconomist at a U.S. bank.<\/p>\n
\"Of course, there is still pain to go through for countries
\nsuch as Thailand and Indonesia, where the recapitalization
\nprocess is by no means over - or even started, for that matter.
\nBut from the investors' point of view, the picture is now
\nclearer.\"<\/p>\n
At 1000 GMT, the U.S. dollar is trading at S$1.6123, well down
\nfrom S$1.6216 in late trading Wednesday.<\/p>\n
The U.S. dollar's fall suggests \"further unwinding of short
\nAsian currency positions as the U.S. dollar continues to
\nconsolidate after its fierce moves last week,\" according to
\nParibas' daily foreign exchange commentary. \"Even evidence of
\nslowing growth failed to weaken the local currency, as a slowdown
\nin growth is already very much discounted.\"<\/p>\n
Sentiment for the Singapore dollar was also buoyed by reports
\non Wednesday that a corporate tax cut might be arrive in
\nNovember.<\/p>\n
The U.S. dollar is also trading at 8,710 rupiah, flat against
\nlevels seen late Wednesday. Intraday trading pushed the dollar as
\nlow as 8,500.<\/p>\n
Investors have been encouraged by Bank Indonesia Governor
\nSjahril Sabirin's comments this week that Indonesia authorities
\nare not planning to implement capital controls, and that rates
\nfor three-month Sertifikat Bank Indonesia notes should continue
\nto fall as the government eases monetary policy.<\/p>\n
The steady tone of the rupiah is also supported by anecdotal
\nreports of global fund managers taking a renewed interest in
\nIndonesian blue chips,\" Paribas said in its report. \"With the
\nrisks reduced significantly from the paralysis of hedge funds,
\ninvestors are likely to get further reprieve from lower interest
\nrates.\"<\/p>\n
The U.S. dollar is also trading at 37.90 baht, down from 38.08
\nbaht Wednesday. If the dollar stays below 38 baht, it could test
\nthis year's intraday low of 37.65 baht, which was reached March
\n30, traders said.<\/p>\n
\"The baht has strengthened as regional currencies have
\nstrengthened, but I'm not hearing aggressive sell orders in the
\nmarket at the moment,\" said a trader at a Japanese bank. He
\nexpects the baht to trade sideways between 37 baht and 40 baht,
\nand doesn't foresee central bank intervention.<\/p>\n
Traders have expected intervention as the baht climbed above
\n38.50 baht and now 38 baht, but Thai Deputy Prime Minister
\nSupachai Panitchpakdi said earlier this week that the country's
\n\"flavor of the month\" status with investors has meant positive
\ncapital inflows and a stronger baht - despite falling interest
\nrates, which are now around 8 percent from 24 percent at the
\nbeginning of the year.<\/p>\n
The U.S. dollar is also trading at 43.20 pesos, slightly lower
\nthat 43.255 peso in late trading Wednesday. In North Asia, the
\nU.S. dollar is trading at 1,334 won, down slightly from 1,350
\nwon; and at 32.946 New Taiwan dollars, down from NT$33.277, a
\nresult of central bank intervention to keep the U.S. dollar below
\nNT$33, traders said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/se-asian-monies-firmer-as-funds-flow-back-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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