Asian currencies down with U.S. economic slowdown news
Asian currencies down with U.S. economic slowdown news
SINGAPORE (Dow Jones): Most Asian currencies slipped late
Wednesday, as data pointing to a sharp U.S. economic slowdown and
regional political uncertainties weighed on sentiment, dealers
said.
Investors are worried that falling global demand, led by a
slowing U.S. economy, would hurt Asian technology exports, which
drive most of their economies, especially South Korea and Taiwan.
A weaker-than-expected National Association of Purchasing
Management's index released Tuesday, which indicated a sharp
slowdown in the U.S. manufacturing sector, heightened concerns
over the pace of the U.S. economic slowdown. The disappointing
data stoked the overnight sell off on Wall Street, with the
Nasdaq tumbling 7.2 percent.
Still, market participants are awaiting U.S. employment data
due Friday for a clearer indication of the extent of the U.S.
economic slowdown, since the NAPM figures have understated
implied GDP in recent years.
In Southeast Asia, the Thai baht, the Indonesian rupiah and
the Philippine peso were weaker. The Singapore dollar bucked the
downtrend, thanks largely to corporate demand for the currency,
dealers said.
The rupiah crept lower Wednesday in lackluster post-holiday
trade as political and security worries continued to fuel dollar-
buying.
Dollar strength against regional currencies also added to
pressure on the rupiah, said dealers.
The dollar closed the Asian day at Rp 9,525, down from Rp
9,440 late Tuesday.
Dealers said the dollar is likely to edge higher this week and
will test the rupiah's current support level at Rp 9,600,
particularly if corporate dollar demand picks up after the
holiday.
"But Bank Indonesia is still guarding the rupiah," said a
foreign bank dealer, referring to central bank efforts to cap the
dollar's rise.
The South Korean currency led the regional market's decline
earlier in the day, when it fell 1.3 percent to an intraday low
of 1,293 won against the dollar, its weakest level since Nov. 19,
1998. Dollar demand from importers added to the pressure on the
won, dealers said.
But verbal intervention by the government and dollar-selling
by Korea Development Bank, believed to be acting on behalf of the
government, reversed the won's fortunes, dealers said.
The dollar finished at 1,270.10 won, down from Tuesday's close
of 1,276.40 won.
Although intervention by the South Korean authorities has
prevented the won from falling to 1,300 won against the dollar,
market watchers said it would only be a matter of time before the
currency hits that psychologically important level.
The New Taiwan dollar won't be unscathed either from the won's
problems, even if Taipei's central bank continues to aggressively
defend the local currency, analysts said.
Against the New Taiwan dollar, the U.S. currency ended at
NT$33.033, up from Tuesday's close of NT$32.943.
On the Philippine Dealing System, the dollar, which was also
supported by corporate demand, closed at 51.040 pesos, up from
51.000 peso Tuesday.
The Singapore dollar resisted the pressure from its regional
counterparts, thanks to corporate investment flows linked to
U.S.-based Solectron Corp's acquisition of local contract
manufacturer NatSteel Electronics Ltd., dealers said.
Dollar profit-taking and the Singapore currency's strength
helped the Thai baht recoup its earlier losses, although
political uncertainties continued to lurk in the background ahead
of Thailand's Jan. 6 elections, dealers said.
After trading above 43.700 baht earlier in the day, the dollar
fell to 43.505 baht. Late Tuesday, the dollar was at 43.605 baht.