Asian currencies lifted by yen
Asian currencies lifted by yen
HONG KONG (Dow Jones): A combination of the yen's strength, abating concern over the tensions between China and Taiwan, relief at South Korea's handling of the Daewoo Group's near collapse, and improving economic fundamentals lifted Asian currencies Thursday.
The Thai baht, the Indonesian rupiah and the New Taiwan dollar all finished Asian trading hours higher.
The Singapore dollar, however, ended down following suspected central bank intervention. The South Korean won closed lower, in response to government-directed dollar purchases by local banks. But overall sentiment toward the region has improved markedly since a week ago, when withdrawal of funds by foreign investors spooked by the cross-strait squabble and Daewoo's cash crisis forced many Asian currencies to multiple-month lows.
By the end of local dealing, the U.S. currency had been pushed higher, to close at 1,203.50 won, up from 1,198.70 won at the previous close.
Positive sentiment also failed to lift the Singapore dollar. After rising strongly in early Asian trading, with the U.S. dollar dropping to a fresh six-month low at S$1.6750, the local currency was pushed sharply lower by aggressive U.S. dollar buying from Singapore banks.
Most dealers assumed that the purchases were executed on behalf of the Monetary Authority of Singapore, as the buying pushed the U.S. currency right up to levels above S$1.6900.
U.S. dollar sellers emerged at the high, however, and the U.S. currency settled back to S$1.6857 toward the end of Asian trading, up from S$1.6810 at the same time the day before.
Despite the suspected intervention, many dealers remain relatively positive on the Singapore currency, reasoning that with the yen, the euro and other Asian regional currencies relatively strong, the MAS should allow the Singapore dollar to appreciate against the dollar, in order to maintain a neutral trade-weighted exchange rate.
Among other regional currencies, the baht rose strongly in early trading, with the U.S. dollar dipping below the 37.00 baht level for the first time in three weeks.
Heavy bidding emerged at the dollar's low, however, pushing the U.S. currency higher again.
Late in Asia, the U.S. dollar was quoted at 37.0550 baht, down from 37.1200 baht the day before.
In the short term, said dealers, the U.S. currency is likely to remain sandwiched between strong buying interest from Thai corporations below 37.00 baht and offshore investors looking to sell the dollar against the baht at levels around 37.10 baht, although "the dollar could try a little lower," according to one trader at a Thai bank.
Trading in the rupiah followed a similar pattern, with the U.S. currency dropping briefly below Rp 6,800 in early trading.
Dollar bids soon emerged, however, to support the U.S. currency just above that level for the rest of the session.
Toward the end of Asian hours, the U.S. dollar was at Rp 6,820, down from Rp 6,870 the previous day.
Against the Philippine peso, the U.S. dollar ended domestic trading at 38.250 pesos, little changed from 38.240 pesos at Wednesday's close.
In Taipei, the U.S. currency ended at NT$32.210, down from NT$32.242 at the previous close, as the strength of the yen and abating concerns over tension with China lifted the local currency.