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.