Asian currencies down on new woes
Asian currencies down on new woes
SINGAPORE (Dow Jones): A slew of negative political and economic news pushed most Asian currencies sharply lower Wednesday, with the Indonesian rupiah taking the biggest tumble.
An overnight bomb blast at the Indonesian attorney general's office, along with continuing political turmoil affecting President Abdurrahman Wahid's government, triggered rupiah selling that pushed the currency to its lowest level in nearly 16 months.
Near the end of Asian trading Wednesday, the dollar was quoted at Rp 9,395, up from Rp 8,960 Tuesday.
In the Philippines, ongoing concerns over low local interest rates, political unrest in the southern island of Mindanao, and fears that the economy is slowing, kept sentiment firmly against the peso.
The dollar closed at a 21-month high of 43.690 pesos, up from 43.535 pesos the previous day. The trading session was abbreviated because of heavy rains that caused flooding in some parts of Manila.
With the dollar climbing as high as 43.695 pesos in intraday trading, dealers said they expected it to breach the 43.700 pesos in the next trading session.
Falling regional currencies also pulled the Singapore dollar lower. Late Wednesday, the U.S. dollar was quoted at S$1.7370, up from S$1.7327 late Tuesday in Asia.
"The rupiah, baht and peso are all affecting the Singapore dollar even though its fundamentals are good," said Steven Brice, currency strategist for Standard Chartered Bank in Singapore.
While the Singapore dollar approached lows it reached last week, dealers said it was unlikely the Monetary Authority of Singapore would intervene to support the local currency, with sentiment so strongly in favor of the U.S. dollar.
"It (intervention) would be like standing in front of a truck," an Asian bank dealer in Singapore said.
The South Korean won ended lower Wednesday amid worries about an upcoming strike at local banks and continued weakness in Southeast Asian currencies.
The dollar finished at 1,117.20 won, up from Tuesday's close at 1,115.30 won.
"I don't see the strike as catastrophic for the won," Brice said.
"It is a negative because it could slow banking reform. And that is clearly something that is undermining sentiment domestically," he said.
Employees at local banks and bank-related financial institutions plan to go on strike on July 11 to protest expected mergers in the banking industry, which they fear will lead to large-scale layoffs.
The Thai baht tumbled to a near nine-month low on the heels of the plummeting rupiah and concerns over a threatened walkout in parliament.
Late Wednesday, the dollar was quoted at 39.515 baht, up from 39.335 baht late Tuesday.
The New Taiwan dollar was the lone Asian currency to finish higher against the U.S. dollar, lifted by the rally in the stock market, foreign exchange dealers said.
The U.S. dollar closed at NT$30.814, down from NT$30.822 late Tuesday.