Asian currencies down late, political risks overshadow yen
Asian currencies down late, political risks overshadow yen
SINGAPORE (Dow Jones): Heightened political risks in Asia overshadowed the yen's recent influence in regional foreign exchange markets to drag currencies lower late Thursday.
The Indonesian currency sank to 31-month lows, below 12,000 rupiah against the dollar, amid fears of street violence in Jakarta as supporters of President Abdurrahman Wahid threatened to flood the capital to defend the leader against any attempt to impeach him, dealers said.
The rupiah regained some footing later in the day on dollar profit-taking and as corporate demand for the U.S. currency waned, said a Jakarta-based dealer.
At 1000 GMT (5 p.m. Jakarta time), the dollar was at Rp 12,000, down from its intraday high, but still above late Wednesday's level of around Rp 11,970.
Some dealers expect the rupiah to slide further to Rp 14,000.
The simmering diplomatic standoff in Sino-U.S. relations - exacerbated after U.S. President George W. Bush's unusually blunt warning to China about its will to defend Taiwan - also cast a shadow on the region's markets, dealers said.
But it was the Singapore dollar which led the fall in Asian currency markets, skidding by about one cent to a new 11-year low before bouncing sharply on suspected intervention by the monetary authority, dealers said.
Already reeling on keen demand for the U.S. currency by local firms seeking to fund their overseas acquisitions, the region's political anxieties and renewed weakness in the yen dealt further blows to the Singapore dollar, dealers said.
The U.S. currency rose to as high as S$1.8245 earlier in the day, its strongest level since mid-1990, when it traded at S$1.8250.
Deutsche Bank's regional currency strategist, Peter Redward, noted that the Singapore dollar was weakening against the currencies of its major trading partners and key export competitors.
This provoked U.S.-dollar sales around S$1.8240-S$1.8245 by the local banks, which dealers believed were acting on behalf of the Monetary Authority of Singapore.
At 0915 GMT (4:15 a.m. Jakarta time), the U.S. dollar was at S$1.8160, still higher than late Wednesday's level of around S$1.8134.
The Philippine peso too was shaken by fears that the growing unrest sparked by the arrest of deposed leader Joseph Estrada, for the capital crime of economic plunder, could turn violent.
Worries about political unrest following Estrada's arrest, the regional currency malaise, and fears that Argentina's financial and monetary woes could spill over into Philippine markets, dragged the peso to its lowest close since Estrada's ouster in January.
The dollar closed at its intraday high of 51.000 pesos on the Philippine Dealing System, up from 50.550 pesos Wednesday.
Weighed by the weakness of its regional peers, the Thai currency drooped to 45.675 baht against the dollar compared with 45.610 baht late Wednesday.
In Seoul, the dollar ended at 1,313.3 won, up from Wednesday's close of 1,307.9 won.
Against the New Taiwan dollar, the U.S. currency closed at NT$32.918, up slightly from NT$32.908 Wednesday.