Asian currencies maintain strenght on domestic factors
Asian currencies maintain strenght on domestic factors
SINGAPORE (Dow Jones): Most Asian currencies maintained their recent strength late Monday on domestic factors, largely unperturbed by the dollar's ascent against the yen and the euro, dealers said.
The Indonesian rupiah ended higher Monday as state banks sold dollars, possibly on behalf of the central bank.
Strong state bank dollar selling sparked talk that authorities are hoping to push the rupiah higher this week as the market waits for President Megawati Soekarnoputri to unveil her new cabinet.
Delays in appointing the cabinet hurt market sentiment last week, pushing the rupiah lower, but players are more cautious this week amid the state bank dollar selling in a thin market.
The dollar moved to an intraday low at Rp 9,330 before recovering to close at Rp 9,470, but still weaker than Rp 9,500 at Friday's close.
"The market is aware the state banks may sell dollars to help the rupiah before Megawati announces the cabinet," said a dealer at a Jakarta-based foreign bank.
At 0909 GMT (4.09 p.m. Jakarta time), the dollar was quoted at 123.91 yen, above 123.70 yen late Friday in New York. The euro was at $0.8798, below $0.8835 late Friday in New York.
The Thai baht extended Friday's gains as Prime Minister Thaksin Shinawatra's acquittal on charges of financial impropriety lifted months of political uncertainty, and raised hopes that it would allow the government to step up its fiscal stimulus efforts, market watchers said.
The dollar was quoted at 45.410 baht, lower than 45.470 baht late Friday. The dollar found some support around 45.300 baht on corporate demand for the U.S. currency and with some foreign banks looking to cover their short-dollar positions, dealers said.
With the country's growing national debt and the economy on the brink of recession, market watchers said the baht's reprieve will likely be short-lived.
Fears the Philippine central bank might tighten foreign exchange rules and monetary policy further to smother excessive speculative trading against the peso, and to some extent speculation of capital controls, bolstered the local currency Monday, dealers said.
The dollar closed at 53.220 pesos on the Philippine Dealing System, down from 53.450 pesos Friday.
The central bank over the weekend said it's considering raising banks' liquidity reserve requirements by another two percentage points to reduce excess peso liquidity that may be used to speculate on the dollar.
Dollar bulls also turned skittish after President Gloria Macapagal Arroyo reportedly said she didn't rule out the possibility of taking drastic steps to curb excessive speculation against the peso, including imposing capital controls as Malaysia has done. Arroyo reiterated that the peso was fundamentally valued near 50 pesos.
The South Korean won recouped its early yen-induced losses on foreign equity fund inflows and exporter dollar sales, dealers said.
The dollar ended at 1,286.2 won, down from Friday's close of 1,288.7 won.
The New Taiwan dollar, too, received a fillip from foreign equity fund inflows and persistent exporter sales of the U.S. currency, dealers said.
The central bank, however, bought around US$200 million throughout the day, keeping a rein on the New Taiwan dollar's appreciation, dealers said.
The U.S. dollar closed at NT$34.650, lower than NT$34.669 Friday.
Bucking the trend, the Singapore dollar lost ground as its recent rally fizzled as the recent wave of long liquidation in the U.S. currency subsided, and as U.S. investment houses turned buyers of U.S. dollars, dealers said.
Against its U.S. counterpart, the Singapore dollar was at S$1.7825, weaker compared with S$1.7768 late Friday.