Asian currencies end lower, despite late surge in yen
Asian currencies end lower, despite late surge in yen
HONG KONG (Dow Jones): The late surge in the Japanese yen helped lift some Asian foreign exchange markets off their intraday lows Tuesday, but regional currencies still ended local trading hours down across the board.
In Southeast Asia the Thai baht sank to a new 12-month low in early dealing, after second quarter GDP figures released late Monday disappointed investors.
The Philippine peso also closed lower, shadowing the baht, while poor market sentiment continued to weigh on the Indonesian rupiah. The Singapore dollar softened in line with the general regional trend.
In North Asia the won closed lower, weakened in part by expectations of early debt repayments by Korean banks. The New Taiwan dollar went untraded after an earthquake forced the closure of financial markets in Taipei.
The disclosure late Monday that the Thai economy expanded by 3.5 percent in the second quarter over the same period the previous year forced the baht sharply lower in overnight trading in Europe and New York.
The dollar buying continued into early trading in Asia Tuesday, pushing the U.S. currency to an intraday high of 40.2700 baht, its highest level since late September last year.
By the end of Asian trading, the baht had clawed back some of its earlier losses, as the U.S. dollar softened to 40.1550 baht.
At that level, however, the U.S. currency was still significantly stronger than 39.9850 baht late in Asia the previous day.
According to Stephen Jen, foreign exchange strategist at Morgan Stanley Dean Witter in Hong Kong, the baht is likely to remain relatively soft over the medium term, even though Thailand's broad economic outlook is favorable.
Trading in the rupiah followed a similar pattern Tuesday, with the U.S. currency appreciating to a high of Rp 8,400, before easing again to finish local interbank trading at Rp 8,360. Late Monday the dollar had been quoted at Rp 8,300.
Analysts and traders alike remained deeply cautious over the rupiah's prospects for recovery, citing a broad range of concerns.
"East Timor may be a mature factor now, as far as the rupiah's exchange rate is concerned, but the Bank Bali scandal is certainly an ongoing influence," said David Simmonds, foreign exchange strategist at Citibank in Singapore.
The suspension of multilateral lending to Indonesia pending a satisfactory clarification of the scandal and the still evolving political process in Jakarta will also continue to weigh on the rupiah for the foreseeable future, warned Simmonds, making a rebound to the 18-month highs seen in July improbable in the near term.
The Singapore dollar also ended lower Tuesday, slipping in parallel with the regional trend. Late in local trading, the U.S. currency was quoted at S$1.7002, up from S$1.6957 the day before.
Healthy bidding interest at S$1.6990 is likely to support the U.S. dollar above that level in the near term, said a trader at a Singapore bank, who expected the U.S. currency to extend its gains.
Against the Philippine peso, the U.S. dollar ended at 40.150 pesos, up from 40.140 pesos the day before.
The Korean won, too, closed down as dealers bought U.S. dollars in anticipation of early repayments of foreign currency- denominated debts by Korean banks.
At the Seoul close, the dollar was at 1,204.50 won, up from Monday's closing level of 1,200.70 won.