Asian currencies end higher on Nasdaq, oil prices report
Asian currencies end higher on Nasdaq, oil prices report
SINGAPORE (Dow Jones): Stunning gains on Nasdaq, easing global oil prices and expectations of U.S. interest rate cuts next year colluded to bolster most Asian currencies late Monday, market watchers said.
The Indonesian rupiah closed higher Monday after the nation's top economics minister said he's ordered state-owned companies, including oil giant Pertamina, to buy dollars direct from the central bank rather than on the market.
Big companies such as Pertamina need millions of dollars to repay debt and fund imports, which is putting downward pressure on the rupiah.
Senior Economic Minister Rizal Ramli's order Monday that the companies should get their dollars from the central bank will ease that pressure, traders said. " This is significant news," said Simon Flint at Bank of America. "Rather than going to the market, the state-owned companies will be trading privately with the central bank," he said.
After trading most the day around Rp 9,530, the dollar slumped on the news to close Asian trading at Rp 9,430.
"They are painting a global backdrop which is stable and favorable for regional markets," said Vasan Shridharan, a treasury economist at Standard Chartered Bank.
The South Korean won led the region's rise, with the Singapore dollar and the Philippine peso just marginally higher.
The dollar finished at 1,183.0 won, down from Friday's close of 1,190.30 won.
Some participants were betting for further strength in the won, but analysts said a slowdown in South Korea's exports and economic growth could force the government to keep a rein on the currency's gains.
"The dollar could break the 1,180 won level, but part of the won's weakness is due to macroeconomic factors, the slowing growth, and we don't see any signs of recovery from the economic side," said Suktae Oh, a Seoul-based economist at Salomon Smith Barney/Citibank.
The New Taiwan dollar was marginally weaker as a possible delay in a hike in Taiwan's weighting in the MSCI indexes next year nullified the impact of Nasdaq's rise on the local bourse, dealers said.
At 0800 GMT (3:00 a.m. EST), the U.S. dollar ended higher at NT$33.035 from Friday's close of NT$33.020, but down from the intraday high of NT$33.075 reached in early trade.
Elsewhere, seasonal remittance inflows from Filipinos working overseas contributed to the Philippine peso's strength, dealers said.
The dollar closed at 49.945 on the Philippine Dealing System, down from 50.050 pesos at the previous close.
The rupiah's strength spilled over to the Singapore dollar, which was at S$1.7338, compared with S$1.7360 late Friday.
The Thai currency was stable at 43.515 baht against the dollar, with the closure of Thai financial markets Monday for a national holiday and offshore participants ignoring the currency following the authorities' recent crackdown on speculative trading.