Asian currencies drift sideways against greenback
Asian currencies drift sideways against greenback
HONG KONG (Dow Jones): Asian regional foreign exchange markets enjoyed a day of relative calm Wednesday, as most local currencies traded sideways against the U.S. dollar.
With Tokyo-based market participants on holiday, dealers in other Asian financial centers were content to sit back and watch the markets drift after the volatility of recent days.
The rupiah, the focus of attention for the past week, softened only slightly against the U.S. dollar even though sentiment toward Indonesian markets remained dismal.
Given the highly illiquid conditions in the currency market, most traders were unwilling to establish new positions.
The risk of seeing their capital wiped out by volatile moves in the rupiah triggered by unforeseen developments in the East Timor crisis or the Bank Bali scandal was far too great compared with the potential rewards, they said.
As a result, the rupiah remained broadly range-bound, with the U.S. dollar trading in a Rp 7,900 to Rp 8,200 band, despite the 3 percent slide in the Jakarta stock market.
Toward the end of Asian interbank trading, the U.S. currency was quoted at Rp 8,050, compared with Rp 7,950 late the previous day.
Among other Southeast Asian currencies, the baht strengthened moderately against the U.S. dollar, although dealers said the Thai currency too was trading in a range.
Late in Asian dealing the U.S. dollar was quoted at 39.4250 baht, down from 39.5250 baht late the day before.
With dollar buying interest emerging at 39.40 baht, and hedgers poised to sell on any rally above 39.60 baht, the currency is unlikely to breach those borders in the near future, barring any new swings in the rupiah, said dealers.
In contrast, the Philippine peso weakened slightly. With no fresh directional impulses, however, trading was subdued. At $189.20 million, volumes on the Philippine Dealing System were down sharply from $314.90 traded Tuesday.
At the local close, the U.S. dollar was quoted against the peso at 39.935 pesos, up from 39.900 pesos the previous day.
Against the Singapore dollar, the U.S. currency ended Asian interbank trading at S$1.6887, up marginally from S$1.6878 the day before.
As long as the boost given to the Singapore currency by the strength of the yen is canceled by the negative impact of events in Indonesia, the U.S. dollar is likely to remain range-bound between S$1.6850 and S$1.6950, said traders.
In other markets, the Korean won eased fractionally, with the U.S. dollar inching higher to close at 1,193 won, up from 1,192.30 won.
The New Taiwan dollar further extended its recent gains, with the U.S. currency dropping to end the session at NT$31.755, down from NT$31.765.