Asian currencies down, intervention talks keep dollar afloat
Asian currencies down, intervention talks keep dollar afloat
Dow Jones, Singapore
Asian currencies were mostly lower Friday in a typically subdued pre-weekend session.
The Singapore dollar experienced the greatest swing as it lost more ground after a choppy ride in the previous session following the de facto loosening of monetary policy.
Late in Asia, the U.S. unit was quoted at S$1.7568, up from S$1.7510 previously.
The New Taiwan dollar and the Philippine peso were clustered on the weak side of late Thursday's levels. The South Korean won, Thai baht and Indonesian rupiah were little changed.
Concerns about intervention continued to support the dollar as central banks in the region stand ready to act against any sharp appreciation of their currencies for fear of losing export competitiveness.
Left to themselves, economic fundamentals would justify broadly stronger Asian currencies, analysts say.
Indeed, such intervention may even prompt protectionist measures from the U.S. and Europe, warned Bhanu Baweja, a currency strategist at UBS Warburg in Singapore.
"That's the real risk," he said.
However, "I do think that combined with a little bit of political pressure and also better equity environment, they will dilute the impact of intervention," he added.
Meantime, interbank players were forced to cover short U.S. dollar positions as Taiwan's central bank continued to aggressively buy the currency, traders said.
The U.S. unit ended at NT$34.400, up from Thursday's NT$34.341. Volume shrank to US$552.5 million from $1.051 billion previously.
A local bank trader in Taipei estimated that the central bank bought about $200 million during the session, mostly during morning trade.
An outflow of funds to cover oil purchases by local oil importers also added to the U.S. dollar's strength, traders said.
In South Korea, the dollar ended at 1,178.2 won, just a tad below Thursday's 1,178.4 won.
"There is a great deal of dollars in the market on foreign stock purchases and exporters' dollar sales," said a Seoul-based trader.
The government didn't actively step into the market to defend the U.S. dollar, according to traders.
Elsewhere, the Philippine peso ended slightly lower as banks bought dollars ahead of an expected rise in demand next week, though trading was largely range-bound amid a lack of fresh news, dealers said.
The dollar closed at 53.44 pesos on the Philippine Dealing System, up from 53.41 pesos Thursday.
Volume thinned to $90 million from $161 million previously as banks chose to hold on to their dollars on expectation of better rates next week when importers buy the U.S. currency to service their requirements.
As against the Indonesian rupiah, the dollar closed at Rp8,218, barely moved from Thursday's Rp8,220.
Dealers said most market players stayed on the sidelines ahead of the weekend, amid a lack of fresh leads.
"I didn't get any calls at all today (Friday)," a dealer with a foreign bank said.
The dollar was also little changed against the Thai baht and was quoted at 41.64 bath late in Asia, compared with 41.645 baht Thursday.