Asian currencies down late on yen's fall, HK peg jitters
Asian currencies down late on yen's fall, HK peg jitters
SINGAPORE (Dow Jones): Most Asian currencies continued to
waver late Friday, as the U.S. dollar regained its footing
against the yen following its overnight retreat.
Market participants were slowly accumulating their long dollar
positions, amid expectations the region's currencies, led by the
yen, would suffer a relapse in coming months, dealers said.
Dollar purchases by investment houses late in the day
accelerated the falls in Asian currencies, some dealers said.
A surge in Hong Kong dollar forwards, fueled partly by renewed
concern over the fate of the city's currency peg, also cast a
shadow on the region's foreign exchange markets, some dealers
said. Market participants remained fixated by Financial Secretary
Antony Leung's remarks last week that the currency peg to the
U.S. dollar is an "obstacle" to economic efficiency, even though
he has since reassured that the peg will remain in place.
Persistent interest to sell dollars against Asian currencies,
however, kept a rein on the U.S. currency's ascent, confining
them within familiar ranges, they added.
"At every level that the dollar rises, we see people selling,
but it's basically profit-taking rather than to initiate short
positions," said a dealer at another European bank.
The dollar suffered a setback in New York Thursday following
steep losses on Wall Street, as a report showing weakness in the
services sector dashed hopes of an imminent, or smooth, recovery.
The weak National Association of Purchasing Management's non-
manufacturing business index, which focuses on the services
sector, appeared to contradict the promising manufacturing NAPM
numbers issued Tuesday. NAPM's services index fell to 45.5 in
August from 48.9 in July.
The dollar's overnight decline provided a respite for Asian
currencies early Friday, but that proved to be short-lived as the
U.S. currency subsequently gained ground against the yen.
At 0905 GMT (4.05 p.m. Jakarta time), the dollar was quoted at
121.33 yen, above 120.98 yen late Thursday in New York.
The Indonesian rupiah closed lower as state banks bought
dollars on behalf of state-owned oil company Pertamina, traders
said.
The dollar closed at Rp 9,075, up from its close Thursday at
Rp 9,030.
Traders said state banks were seen buying dollars on behalf of
Pertamina which needs the cash to meet its debt obligations.
But they said trade was thin ahead of the weekend, with many
players not wanting to take fresh positions.
They said the 2002 state budget, handed down by President
Megawati Soekarnoputri Friday, had no impact on trade as most of
the numbers were already anticipated.
Megawati took bold steps in her first budget, promising to
raise electricity and fuel prices again in 2002 in a bid to
reduce the country's debts.
In Seoul, the dollar finished at 1,290.1 won, up from
Thursday's close of 1,286.9 won.
"We heard that offshore speculators were buying dollars," said
Suktae Oh, a Seoul-based economist at Citibank.
The Singapore dollar, skirting around the S$1.7550 support
level against the U.S. currency, was quoted at S$1.7549, down
from S$1.7513 late Thursday. The Singapore dollar could slide
toward S$1.7580 if it breaks that support level, dealers said.
The Thai currency was at 44.695 baht per dollar, weaker than
44.480 baht late Thursday.
On the Philippine Dealing System, the peso succumbed to the
regional currency slump and short-dollar covering by banks,
dealers said.
The dollar closed at 51.380 pesos, up from 51.335 pesos
Thursday.
The New Taiwan dollar yielded to the pressure from the yen and
a 0.8 percent slide on the local stock market. The central bank
sold an estimated US$50 million during the session to cushion the
local currency's decline, dealers said.
The U.S. dollar closed at NT$34.656, higher than NT$34.616
Thursday, in dealings valued at US$364 million.