Asian currencies mixed as S'pore dollar off 11-year low
Asian currencies mixed as S'pore dollar off 11-year low
SINGAPORE (Dow Jones): Asian currencies were mixed late Friday as central banks kept up with their vigil, following the dollar's surge to multi-month highs against the yen and euro, dealers said.
The Singapore dollar and New Taiwan dollar fell, while the Philippine peso, South Korean won, Indonesian rupiah and Thai baht were only marginally higher.
Dealers said that the rupiah slightly appreciated as players liquidated their long-dollar positions.
The unwinding came amid the uncertainty over the outcome of next month's impeachment proceedings against President Abdurrahman Wahid.
The market has been building long positions in the belief that political instability in the run up to the August 1 proceedings will help the dollar.
The dollar closed at Rp 11,340, lower than Rp 11,360 at Thursday's close.
The yen had earlier slipped to a three-month low of 125.95 yen to the dollar on reported remarks by Koichi Kato, a senior Liberal Democratic Party lawmaker close to Prime Minister Junichiro Koizumi, that Japanese authorities should help the economy by not seeking to prevent the yen from weakening. He said he believed the authorities should allow the dollar to rise naturally to 130 or 135 yen.
At 0900 GMT (4 p.m. Jakarta time), the dollar was quoted at 125.79 yen, up from 125.75 yen late Thursday in New York and 125.36 yen late Thursday in Tokyo.
The euro sank to a fresh eight-month trough of $0.8350 earlier in the day, after the European Central Bank decided to leave interest rates unchanged Thursday despite the ailing euro-zone economy.
Though the reaction in Asian foreign exchange markets to the dollar's advance against the major currencies has largely been reined in, market watchers said sentiment toward the U.S. currency remains bullish.
"So far the data on the U.S. economy do support the turnaround story in the second half of the year," said Thio Chin Loo, regional currency strategist at BNP Paribas.
The Monetary Authority of Singapore's suspected defense of the Singapore dollar late Thursday - when the currency slumped to a new 11-year low of S$1.8273 against its U.S. counterpart - has failed to deter dollar-bulls, dealers said.
Dealers believed market participants had raised the ire of the monetary authority again when they pushed the Singapore dollar even further to eclipse Thursday's low.
The Singapore dollar sank to a fresh 11-year low of S$1.8286 against the U.S. currency late Friday.
Late Friday, the U.S. dollar was quoted at S$1.8265, still higher than S$1.8245 late Thursday.
Expectations the Singapore government will confirm the economy has slipped into a recession, when it announces second-quarter gross domestic product data Tuesday, revived speculation the central bank might ease its policy stance, dealers said. This contributed to the Singapore dollar's slide to new 11-year lows, they added.
Against the New Taiwan dollar, the U.S. currency ended at NT$34.473, slightly higher than Thursday's close of NT$34.465.
In Seoul, the dollar finished at its intraday low of 1,294.0 won, down from Thursday's close of 1,296.6 won.
The Philippine peso rebounded on slowing importer demand for dollars and suspected intervention by the central bank, traders said.
The dollar closed at 52.890 pesos, down from 52.980 pesos Thursday.
The Thai currency was stronger at 45.430 baht per dollar in thin offshore trading, compared with 45.460 baht late Thursday, as participants bailed out of their U.S. currency positions.
Thai financial markets were closed Friday for a national holiday.