Asian currencies higher late, as yen climbs against dollar
Asian currencies higher late, as yen climbs against dollar
SINGAPORE (Dow Jones): Asian currencies got a respite from recent dollar strength Thursday, rallying across the region in line with the yen's rise against the U.S. currency and the euro.
Local developments also played a role, with Indonesian politics helping the rupiah and prospects for higher interest rates in Thailand providing support for the baht.
The yen's climb was more the result of a weak euro than anything else dealers said.
The dollar got caught in the crossfire and was forced lower as well. That provided impetus for market participants around Asia to unwind some of their long-dollar positions against regional currencies, dealers said.
The foreign exchange market welcomed news out of Jakarta that President Abdurrahman Wahid could be forced from office sooner than expected. Officials announced that Wahid will face an impeachment hearing Aug. 1 on corruption charges before the nation's highest legislative body.
The rupiah dipped below 11,000 to the dollar for the first time since May 9, but later gave up some of its gains. Near the end of Asian trading the dollar was quoted at Rp 11,065, down from Rp 11,310 late Wednesday. The rupiah has gained 4.7 percent against the dollar this week.
However, worries that Wahid may take "drastic steps" to keep himself in power should keep the rupiah from advancing too much further, Bank of America Asia said in a note to clients. So far, demonstrations by Wahid supporters in Jakarta have been relatively peaceful.
The Thai baht proved resilient, despite the sacking this week of the country's central bank governor.
The baht benefited from the firmer yen, prospects of higher interest rates and the anticipation of new foreign exchange reporting requirements to be released Friday.
Late in Asia the dollar was quoted at 45.340 baht, down from 45.355 baht late Wednesday.
Newly installed central bank governor Pridiyathorn Devakula has said he favors higher domestic interest rates to help stem capital outlflows. But a number of analysts say such a policy is short-sighted and will end up hurting the country's fragile financial sector.
The Philippine peso shrugged off a new round of weak economic data and moved higher in tandem with the yen Thursday.
The dollar closed at 50.500 pesos on the Philippine Dealing System, down from 50.565 pesos Wednesday.
The government announced that gross domestic product grew 2.5 percent in the first quarter, weaker than the 3.2 percent increase expected by the market, and down from 3.8 percent growth in the fourth quarter of 2000.
The market was also unaffected by the central bank's decision to leave its overnight rates unchanged Thursday.
The New Taiwan dollar also benefited from a stronger yen and modest inflows of foreign equity funds.
The U.S. dollar ended at NT$33.965, down from Wednesday's NT$34.013.
The South Korean won also tracked the yen to a stronger finish.
The dollar was quoted at 1,282.7 won, down from Wednesday's close of 1,289.5 won.
The dollar still has downside in it, said a trader, noting that local banks have "really big" dollar deposits that they may sell.
Against the Singapore dollar, the U.S. currency was quoted at S$1.8068 late in Asia, down from S$1.8094 late Wednesday.