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.