Asian currencies fall late, market awaits data
Asian currencies fall late, market awaits data
Nirmala Menon, Dow Jones, Kuala Lumpur
Most Asian currencies fell late Monday as the U.S. dollar firmed against the yen on short-term position adjustments, but trading was dulled by a U.K. bank holiday and the upcoming long Labor Day weekend in the U.S.
Market players also kept to the sidelines ahead of the issue of several key economic indicators out of the U.S. and Japan this week, as well as U.S. Federal Reserve Chairman Alan Greenspan's speech at an economic symposium Friday.
"People are not taking positions. There's hardly a sound in the market. The market is dead," declared a regional currency dealer at a Singapore-based Asian bank.
The health of the U.S. economy remains the key factor underpinning near term market sentiment, with players largely neutral to economic indicators from individual Asian countries.
So far, data from the U.S. has sent mixed signals, and until there's some clarity, Asian currencies will likely remain locked in range-bound trading, market participants said.
"The market is very uncertain (on) what's the direction going forward. Most of the dollar/regionals are going to be trapped in range. The upside is limited, so is the downside unless there are clearer prospects (about the U.S. economy)," said Jimmy Koh, head of treasury research at Singapore's United Overseas Bank.
To that end, Greenspan's remarks on the economy Friday will be closely watched, Koh said.
This will be Greenspan's first public appearance after the Aug. 13 Federal Open Market Committee meeting where the Fed opted to keep interest rates unchanged.
Asian currencies mostly ignored Hong Kong Executive Council member James Tien's comments on the Hong Kong dollar's peg to the U.S. currency.
Tien Sunday said the abolition of the exchange rate system wouldn't have a significant impact overall.
His remarks came as talk about a change to the peg resurfaced in the market.
But "people are immune to it (the talk)," said an Asian bank dealer in Singapore, who noted that such rumors pop up occasionally in the market.
The New Taiwan dollar ended at its lowest level in nearly three months as offshore players vigorously covered their short positions on the U.S. dollar.
The U.S. dollar closed at NT$34.245 - its highest since May 28 - from NT$34.139 Friday.
The dollar firmed for the third consecutive session against the South Korean won, which moved in tandem with the Japanese currency.
The dollar ended at 1,205.3 won, up from 1,202.6 won Friday, after moving between 1,197.5 won and 1,205.8 won intraday.
The U.S. dollar also firmed against the Indonesian rupiah in line with the regional trend, and also real corporate and importer demand, but its rise was capped as the central bank actively sold the U.S. currency, dealers said.
The dollar rose as high as Rp 8,975 in intraday trading but pulled back after central bank intervention. The dollar was quoted at Rp 8,935 late in Asia, from Rp 8,890 Friday.
The U.S. dollar edged up against its Singapore counterpart as the weaker yen sparked modest buying of the U.S. unit in a thin market.
Late in Asia, the U.S. dollar was quoted at S$1.7586, from S$1.7566 late Friday.
Offshore dollar buying helped the U.S. currency edge up against the Thai baht, although the local unit recovered some ground late in Asia.
News that the Thai government may repay loans borrowed under an expired International Monetary Fund rescue fund by January, a year ahead of schedule, didn't affect the market, dealers said.
Thailand owes about US$1 billion directly to the IMF, and about $6 billion to other donors in the rescue program.
Analysts said early repayment would be positive for sentiment as it would ensure the debt is eliminated while foreign reserves are high.
Late in Asia, the dollar was quoted at 42.296 baht, compared with 42.335 bath Friday.
Dollar selling by exporters helped the Philippine peso erase early losses and gain ground against the U.S. unit for the first time after seven straight sessions of losses.
The U.S. currency fell back from a high of 52.410 pesos to end at its intraday low of 52.230, pesos down from 52.365 pesos Friday.