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.