Asian currencies gain on American dollar's pullback
Asian currencies gain on American dollar's pullback
SINGAPORE (Dow Jones): Asian currencies were firmer on the
dollar's pullback against the Japanese yen, but they stayed
within familiar ranges as investors awaited Federal Reserve
Chairman Alan Greenspan's Senate committee testimony, dealers
said.
The Indonesian rupiah closed slightly higher in thin trading
Tuesday due to persistent dollar selling by state banks, dealers
said.
The dollar closed at Rp 9,599, down from Rp 9,615 at Monday's
close.
State banks, which were believed to have acted on behalf of
the central bank, started selling the dollar immediately after
trading opened, dealers added.
"I think they wanted to set the dollar direction downward by
selling the dollar right after trading opened," said a dealer
with a local bank.
But, the dollar found strong support near IDR9,580 as local
companies still need to buy the unit to pay offshore obligations.
Dealers said overall trading was quiet as the market lacked fresh
news to trade on.
They expect trading to remain quiet Wednesday and forecast the
dollar to be remain in a narrow range of between Rp 9,580 and Rp
9,610.
Investors, wondering how quickly the slowing U.S. economy
might rebound following the Fed's two aggressive half-point
interest rate cuts in January, are looking for clues in
Greenspan's testimony before the U.S. Senate Banking Committee at
1500 GMT (10:00 a.m. EST) Tuesday.
"It is difficult to determine whether the testimony will be
positive for the dollar, but our line call is that it will be, as
it is likely to raise hopes of a rebound in growth in the second
half of 2001," said Peter Redward, a regional currency strategist
at Deutsche Bank.
"Asian currency markets appear to be rangebound in advance of
this important speech," he said.
Market participants were also noncommittal ahead of the
publication of U.S. January retail sales data, which is due to be
issued one-and-a-half hours before Greenspan's testimony.
Still, foreign equity fund inflows and the yen's gains lifted
the South Korean won and the New Taiwan dollar, dealers said.
The South Korean won was the bigger gainer, as offshore banks
"overweight in dollar-won" closed out their positions in the non-
deliverable forward market, said a market watcher.
The dollar finished at 1,255.00 won, down from 1,264.30 won
Monday.
The New Taiwan dollar relinquished its gains to end in
negative territory, as foreign equity funds flowed out of the
local bourse late Tuesday and as local importers bought the U.S.
currency, dealers said.
The U.S. dollar closed at NT$32.334, up from NT$32.318 Monday.
At 0840 GMT, the dollar was quoted at Y117.19, below Y117.50 late
Monday in New York. The dollar was at Y117.79 late Monday in
Singapore. Tokyo financial markets were closed Monday for a
national holiday.
The Singapore dollar strengthened to S$1.7453 against its U.S.
counterpart, from S$1.7473 late Monday.
Participants were unwilling to take aggressive positions ahead
of the Monetary Authority of Singapore's much awaited statement
on its monetary policy, expected next week, dealers said.
The de facto central bank is widely expected to change to a
neutral policy bias, from its current mildly tightening stance.
In the Thai currency market, the dollar fell to 42.40 baht
from 42.65 baht late Monday.
A meeting between the Thai central bank and commercial bank
Treasury departments scheduled for Friday fueled rumors the
central bank might step up the reporting requirements for foreign
exchange transactions, which would allow it to better monitor
flows and enforce restrictions on baht supply to offshore
speculators, dealers said.