Asian currencies end mixed in tight trading ranges
Asian currencies end mixed in tight trading ranges
Dow Jones, Singapore
Asian currencies were mixed late on Monday as stronger stock
markets generally supported gains, but rises were tempered by
suspected government intervention in South Korea and Taiwan.
The South Korean won ended weaker and the New Taiwan dollar
finished steady. The Philippine peso drifted lower, but the
Singapore dollar and Thai baht were modestly stronger. Indonesian
financial markets were closed for a public holiday.
Overall bids and offers were fairly well matched, which kept
trading ranges tight, a trader at a European bank in Singapore
said.
"It's pretty mixed. There was a sell-off earlier (in the
dollar versus regional currencies), but now they (market players)
are buying back. It's the same guys (who were buying and
selling)," he said.
Analysts said regional currencies are underpinned by
expectations of better global growth in the current half-year,
led by the U.S., which is a major export market for Asia.
Hence "people are still looking to expand positions in Asian
currencies," said Bhanu Baweja, a currency strategist at UBS AG.
Security issues, which were in the spotlight recently,
appeared to have largely subsided, except in the Philippines, he
said.
"I don't think the market is going to trade off that (security
concerns) until it (something untoward) happens."
After the deadly bombing at a major hotel in Jakarta on Aug.
5, there were fears that Sunday's Independence Day celebrations
in Indonesia could be a target for similar terrorist attacks, but
the day passed without incident.
Taiwan's central bank was suspected of intervening in the
currency market, resulting in the local dollar erasing early
gains to close unchanged at NT$34.358 to the U.S. unit.
The New Taiwan dollar's initial rise was related to inflows
for equity investments.
Trading volume amounted to US$450 million, up from $433.50
million in the previous session. One dealer said the central
bank's trades may have accounted for as much as $150 million of
total volume.
"It looked like the central bank was in the market a lot
during the afternoon," said a foreign bank dealer in Taipei.
Taiwan's central bank prefers to have the local dollar move in
tandem with the currencies of export competitors such as South
Korea and Japan in order to preserve competitiveness.
The Singapore dollar rose on the back of fresh investments in
the local stock market, and hopes of a brighter economic outlook,
dealers said.
The U.S. unit was quoted at S$1.7472 late in the local
session, down from S$1.7480 late on Friday.
Interbank players unwound long U.S. dollar positions amid
hopes the government's plans to lower business costs through cuts
in mandatory pension fund contributions would help buoy the
economy.
The Thai baht moved in a similar pattern to the Singapore
dollar. Late in Asia, the U.S. unit was quoted around 41.61 baht,
down from 41.66 baht late on Friday.
Elsewhere, lingering security concerns and anticipation of
sustained dollar demand from importers pushed the beleaguered
Philippine peso to yet another new five-month closing low,
dealers said.
The dollar ended at the intraday high of 55.090 pesos on the
Philippine Dealing System, up from 55.060 pesos on Friday. This
was the dollar's strongest finish since its record closing high
of 55.099 pesos on March 12.
Traders said many banks didn't want to unload their dollar
holdings on hopes the U.S. unit would rise to breach 55.160
pesos, its highest intraday level so far this year.
"Many are holding their dollars close to their chest," said a
local bank trader.
Among the factors fueling bullish sentiment on the dollar are
a seasonal rise in imports, and continued worries over the
country's security situation after the July 27 mutiny by over 300
soldiers in Manila's financial district.