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.