Asian currencies await U.S. rate verdict
Asian currencies await U.S. rate verdict
Netty Ismail, Dow Jones, Singapore
Asian currencies were mixed late Tuesday, with the market on tenterhooks ahead of an anticipated interest rate cut by the U.S. Federal Reserve later in the global trading day, dealers said.
The Indonesian currency took center stage, slipping below Rp 11,000 to the dollar. But it quickly regained its footing above that psychologically important threshold.
That was the first time since President Megawati Soekarnoputri took office July 23 that the dollar had traded above Rp 11,000, as the slow pace of economic reforms in Indonesia tries the market's patience.
The dollar closed at Rp 10,835, down from its close Monday at Rp 10,940.
Trading in other Asian currencies was subdued, as participants refrained from taking any major positions ahead of the Fed's policy-setting meeting, dealers said.
The Singapore dollar and the Philippine peso were weaker. The Thai baht and the New Taiwan dollar were steady, while the South Korean won was slightly firmer.
The region's currencies have priced in expectations of up to a 50 basis-point cut in U.S. interest rates.
Foreign direct and portfolio investment inflows bolstered the South Korean won, dealers said.
The dollar finished at 1,295.6 won, lower than 1,297.5 won Monday.
The New Taiwan dollar ended at NT$34.526 against the U.S. dollar, unchanged from Monday's close.
The Singapore dollar's rebound Monday proved to be short- lived. The currency floundered back past S$1.8200 Tuesday as the U.S. dollar strengthened against the euro and yen ahead of the anticipated Fed rate cut, dealers said.
The U.S. dollar was at S$1.8233, higher than S$1.8185 late Monday. The Singapore dollar rallied to as high as S$1.8112 Monday.
On the Philippine Dealing System, the dollar closed at 51.965 pesos, slightly higher than 51.920 pesos Monday.
Bank of America said in a research note that the peso was stuck in a tight range "with most players reluctant to extend their long (dollar) positions ahead of an expected seasonal remittance inflows" from Filippinos working overseas.
The Thai currency was steady at 44.670 baht per dollar. It traded at 44.680 baht late Monday.