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.