Asian currencies firm as greenback gets in a twist
Asian currencies firm as greenback gets in a twist
SINGAPORE (Reuters): Asian currencies were largely steady in
late yesterday trade as the U.S. dollar grappled with conflicting
reports about the likelihood of a near-term U.S. interest rate
hike.
The Thai baht dominated activity in otherwise sluggish,
holiday-thinned trade as continuing demand for investment in
Bangkok Bank's recent share issue triggered a squeeze in the
offshore swap market, spurring dollar sales for baht.
"People need baht for the Bangkok Bank share issue. And with
the tom/next very firm today, those who couldn't get baht had to
sell dollars in the spot market," said a dealer at a U.S. bank in
Singapore.
He added that persistent dollar bids by a Hong Kong-based
house had limited the baht's rise to the 38.40 level.
The Thai cabinet raised the foreign debt ceiling for
government and state enterprises in 1998 to US$7.2 billion from
$4.1 billion set previously.
The market continued to await details of a planned
international sovereign bond issue and measures to ease a severe
liquidity crunch.
Finance ministry sources have said Thailand plans to issue
$1.0-1.5 billion worth of Yankee bonds in May or June.
In the Philippines, the peso succumbed to growing jitters
ahead of the May 11 presidential election, hitting a low of 40.10
to the dollar as investors shifted their portfolios out of
Manila.
"It's normal to have a volatile market when there's going to
be a big political change," said a commercial bank trader in
Manila. "I think the momentum is just starting. It may go as low
as 43."
The central bank cut its rediscount rate to 13.7 percent for
May from 14.777 percent in April.
Further north, the South Korean won reached a new year high of
1,343 to the dollar as expected export deals in a market long of
dollars countered apparent government attempts to talk the local
currency down.
A Seoul finance ministry official said there were still
uncertainties dormant in the market and the dollar was unlikely
to continue its sharp drop.
A central bank official said the bank might take steps if the
dollar fell too sharply, but declined to elaborate.
Activity in most other currency markets was subdued, with
Indonesia and Malaysia on holiday.
Dealers said the rupiah would continue to drag its feet around
the 8,000 level to the dollar as the market kept a wary eye on
escalating student protests and worried about the private debt
issue.
The Malaysian ringgit and Singapore dollar tracked the yen's
moves within familiar ranges in slow trade.
The Taiwan dollar regained lost ground triggered by foreign
fund outflows as the yen recovered slightly.