Asian currencies down prior to Greenspan report, U.S. retail data
Asian currencies down prior to Greenspan report, U.S. retail data
SINGAPORE (Dow Jones): Most Asian currencies drifted lower
late Monday in cautious, range-bound trading, as the yen provided
a weak lead with Japanese financial markets closed for a national
holiday, dealers said.
The Indonesian rupiah closed slightly lower in thin trading
Monday, on demand for the dollar from local companies, dealers
said.
The rupiah, however, rebounded from its intraday low of Rp
9,620 as a state bank, believed to be acting on behalf of Bank
Indonesia, sold the dollar.
The dollar closed at Rp 9,615, up slightly from Rp 9,600
Friday.
Dealers said local companies purchased the dollar to pay
offshore liabilities.
While domestic political uncertainties continue to affect the
rupiah, dealers said that wasn't the major force that dragged the
local unit lower Monday.
"The market won't react significantly unless major political
developments take place," said a dealer with a foreign bank.
"Fortunately, it was quiet today."
Dealers expect the dollar to trade between Rp 9,590 and Rp
9,630 Tuesday.
The South Korean won, the New Taiwan dollar, the Singapore
dollar, the Thai baht and the rupiah - which was hurt by
Indonesia's political problems rather than external factors -
were slightly weaker. Resisting the pressure from its regional
peers, the Philippine peso was higher.
The South Korean currency ended at 1,264.30 won against the
dollar, after recovering from its intraday low of 1,268.00 won as
the stock market rose. However, the won remained weaker than
Friday's closing level of 1,261.60 won.
The New Taiwan dollar ended at NT$32.318 against its U.S.
counterpart, lower than Friday's close of NT$32.282, but a tad
firmer than Monday's intraday low of NT32.330.
Overall, foreign exchange dealers were largely noncommittal
ahead of U.S. Federal Reserve Chairman Alan Greenspan's
semiannual testimony to Congress and U.S. January retail sales
data due Tuesday. The market will be looking out for clues on the
depth of the U.S. economic slowdown and how aggressive a likely
interest rate cut would be during the Fed's next policy-setting
meeting March 20.
Unless the Japanese yen breaks out of its recent trading
range, Asian currencies will likely remain trapped within
familiar trading bands for the rest of the week, market watchers
said.
"I don't think there's much excitement to get the currencies
out of the range," said Thio Chin Loo, a currency strategist at
BNP Paribas Group.
In Asian trading hours, the Japanese yen floundered to as low
as Y117.95 against the dollar in thin trading. At 0855 GMT, the
dollar was quoted at Y117.65, above Y117.55 late Friday in New
York and Y116.50 late Friday in Tokyo. The Japanese central bank
surprised markets Friday by trimming its discount rate to 0.35
percent from 0.5 percent, a symbolic move expected to do little
to stimulate the country's economy.
The Singapore dollar edged lower to S$1.7473 against the U.S.
currency, from S$1.7470 late Friday.
Fears that the Monetary Authority of Singapore might defend
the local currency around S$1.7500 continued to keep a rein on
its losses, dealers said. Analysts expect the Singapore dollar to
remain wedged between S$1.7400 and S$1.7500 this week.
Influenced by the regional currency weakness and nervousness
ahead of the imminent announcement of Thailand's cabinet lineup,
the Thai currency weakened to 42.650 baht to the dollar, from
42.585 baht late Friday.
Equity fund inflows helped support the Philippine currency,
which closed at 47.820 pesos, from 48.200 pesos Friday. The peso
largely shrugged off the expected cut in the central bank's
overnight rates, effective Monday.