Yen stability boosts SE Asian currencies<\/p>\n
SINGAPORE (Dow Jones): Southeast Asian currencies continued to
\nride higher on the back of the yen's precarious stability during
\nAsian trading hours yesterday.<\/p>\n
In quiet trading, the baht, the Philippine peso, the ringgit
\nand the Singapore dollar all edged higher against the U.S.
\ndollar, prompting some observers to predict that, should the yen
\nremain steady, Southeast Asian markets may be in for a repeat of
\nFebruary's bear market rally.<\/p>\n
\"I don't see much downside in the short term for the regional
\ncurrencies,\" said Fong Cheng Hong, regional economist at Nomura
\nSingapore.<\/p>\n
\"At current levels there is a lot of interest from foreign
\ninvestors, particularly in Europe, to pick up cheap assets in
\nAsia. As the money flows in, it will support the regional
\ncurrencies,\" she said.<\/p>\n
Fong added, however, that the risk of further yen depreciation
\nexerting a drag on Asia's other currencies will cap their upside
\nfor the time being.<\/p>\n
The Thai baht and the Philippine peso have the most potential
\nto rally against the U.S. dollar on an inflow of foreign funds,
\npotentially reaching levels around 38 Thai baht and 38 Phlippine
\npeso respectively, say analysts.<\/p>\n
Late in Asian trading the U.S. dollar was quoted at 40.9650
\nThai baht, compared with 41.4550 Thai baht towards the end of
\ninterbank trading in Singapore on Monday.<\/p>\n
At the close of trading on the Philippine Dealing system, the
\nU.S. currency was at 41.265 Philippine peso, down from 41.500
\nPhilippine peso at Monday's close.<\/p>\n
Although the ringgit also strengthened on Tuesday, fears over
\nthe integrity of the banking sector and the unity of the
\npolitical leadership continue to weigh heavily upon the Malaysian
\ncurrency, say analysts.<\/p>\n
Toward the end of Asian trading Tuesday the U.S. dollar was
\nquoted at 3.9210 Malaysian ringgit, compared with 3.9462
\nMalaysian ringgit late on Monday.<\/p>\n
As for the rupiah: \"The very best case scenario is that the
\nrupiah will strengthen to 13,500 - and that's factoring a lot of
\ngood news,\" said Fong at Nomura.<\/p>\n
The high degree of perceived political risk in Indonesia means
\nthat investors will steer clear of the country for the
\nforeseeable future.<\/p>\n
At the same time, Indonesian capital will continue to flee
\noffshore in search of safe investment havens, while maturing
\nforward contracts will maintain a steady demand for U.S. dollars,
\ndriving the hapless rupiah ever lower, argues Fong.<\/p>\n
Late in Asia the U.S. dollar was quoted at 14,525 rupiah,
\ncompared with 14,650 late the previous day.<\/p>\n
Analysts maintain that at current levels, the Singapore dollar
\nis overvalued on a fundamental basis relative to competitor
\ncountries such as South Korea and Taiwan and argue that the
\ncurrency is set to depreciate further over the long term.<\/p>\n
In the immediate future, however, the Singapore dollar is
\nlikely to strengthen further.<\/p>\n
Although there is strong U.S. dollar buying interest stationed
\naround S$1.6350, a rally as far as S$1.6000 is possible should
\nthe yen recover to around Y130 to the U.S. dollar, they say.<\/p>\n
In late trading in Asia on Tuesday the U.S. currency was
\nquoted at S$1.6378, compared with S$1.64996 towards the end of
\nMonday's session.<\/p>\n
In north Asia, the Korean won ended higher in line with the
\nregional trend, with the U.S. dollar finishing domestic trading
\nat 1,383 Korean won, down from 1,393 Korean won at Monday's
\nclose.<\/p>\n
The new Taiwan dollar, however, slipped back against the U.S.
\ncurrency.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/yen-stability-boosts-se-asian-currencies-1447893297",
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