Asian currencies down late, U.S. stock gains boost dollar
Asian currencies down late, U.S. stock gains boost dollar
Alan Yonan Jr., Dow Jones, Singapore
The U.S. dollar firmed slightly against most Asian currencies Thursday, helped by a rare gain in U.S. stock prices and concerns that Japanese monetary authorities might take action to prop up the dollar against the yen.
The only regional currency to trump the dollar was the Indonesian rupiah, which rallied on the prospects of capital inflows from the government's sale of distressed assets left over from the 1997-98 Asian financial crisis.
The Dow Jones Industrial Average closed higher Wednesday after falling for seven straight sessions, providing a solid footing for the dollar heading into the Asian trading day.
In Tokyo, officials from Japan's Ministry of Finance reiterated Thursday that they were prepared to intervene in foreign exchange markets to keep the dollar from falling too fast against the yen.
The "jawboning" helped push the dollar above the 117 yen level for the first time in three sessions, setting a strong tone for the U.S. currency against its Asian counterparts.
South Korean government officials continued their efforts to "talk down" the won, which has appreciated 12 percent against the dollar since early April. Authorities in South Korea, Japan and Taiwan have all expressed concern that excessive currency strength is having a negative impact on the competitiveness of their exports in global markets.
The Bank of Korea released a statement saying it is "clearly aware of the necessity of stabilizing the foreign exchange market," suggesting that it would step into the market to slow the dollar's decline against the won if warranted.
The BOK, using state-run banks as agents, bought small amounts of the U.S. currency Thursday, dealers said. The state-run banks have intervened on a number of occasions in recent weeks, buying as much as US$500 million per session.
The dollar closed at 1,174.8 won, up from 1,171.8 won on Tuesday. The won wasn't traded Wednesday because markets in Seoul were closed for a public holiday.
The New Taiwan dollar fell for the first time in four sessions as the yen's slide encouraged interbank traders to cover their short U.S. dollar positions.
The U.S. dollar closed at NT$33.040, up from NT$32.999 Wednesday.
Exporters continued to sell the U.S. dollar, but they did so cautiously following the central bank's intervention to support the U.S. currency a day earlier.
Dealers said the Taiwan central bank bought about $200 million Wednesday in the open market and a much smaller amount Thursday.
Against the Singapore dollar, the U.S. dollar was quoted at S$1.7423 late Thursday, up from S$1.7390 late Wednesday.
The currency pair traded in a fairly narrow range for most of the session, with corporate U.S. dollar selling putting pressure on the currency.
The U.S. dollar pushed higher against the Singapore dollar and other Asian currencies late in the session following its gains against the yen.
The U.S. dollar broke resistance at S$1.7420 and touched an intraday high of S$1.7430 as European-based market participants entered the fray, buying to cover their short positions in the U.S. dollar.
Trading in the peso was fairly quiet as market players tried to gauge what the makeup of Congress will be when the legislative body resumes sessions Monday.
The focus is on whether administration-allied Senators will be able to retake majority control of the Upper House when the sessions resume and ensure the smooth passage of key economic bills.
The dollar closed at 50.380 pesos on the Philippine Dealing System, up a touch from 50.360 pesos Wednesday. Volume fell to $77.75 million from $147.5 million Wednesday.
The rupiah was buoyed by an inflow of foreign funds to pay for the government's sale of its $125 million stake in PT Telekomunikasi Indonesia.
The Indonesian Bank Restructuring Agency's sale next week of Rp 145 trillion in loans is also helping sentiment toward the local currency.
Late in Asia the dollar was quoted at Rp 8,885, down from Rp 8,995 late Wednesday.
Against the baht, the dollar was quoted at 40.585 baht, up from 40.500 baht late Wednesday. It was the dollar's second straight rise against the baht after hitting a two-year low earlier in the week.
Thai exporters are particularly concerned about excessive volatility in the exchange rate and would prefer the baht to stabilize within a range of 40.00 baht-41.00 baht to the dollar, Deputy Commerce Minister Suvarn Valaisathien said Thursday after meeting with central bank Governor Pridiyathorn Devakula.