Asian currencies mixed, baht breaks out of slump
Asian currencies mixed, baht breaks out of slump
Dow Jones, Singapore
The Thai baht broke out of its slump Monday on the heels of a
recovery in the local stock market, while other Asian currencies
were rangebound ahead of several potentially market-moving events
in the U.S. and Japan later this week.
The baht had taken a beating the previous two sessions
following an announcement last week by the largest pension fund
in the U.S. that it would sell its public investments in four
Southeast Asian nations.
Thailand bore the brunt of the move by the US$150 billion
California Public Employees' Retirement System, or Calpers, which
also affected markets in Malaysia, the Philippines and Indonesia.
The Stock Exchange of Thailand Index was up around 1 percent
late Monday after losing 6.6 percent of its value over the
previous two sessions.
The stock market rebound and month-end exporter demand for the
baht helped the local currency advance modestly against the U.S.
dollar. Near the end of Asian trading the U.S. dollar was quoted
at 43.830 baht, down from 43.925 baht late Friday.
Analysts said Calper's has an estimated $100 million invested
in the four countries, adding that the liquidation would unlikely
to lead to sustained capital outflows from the region.
Elsewhere in Asia, the Singapore dollar and New Taiwan dollar
were slightly stronger. The South Korean won was a touch weaker,
while the Indonesian rupiah was little changed. Markets in the
Philippines were closed for a public holiday.
Market players will be looking for direction from several
upcoming key pieces of news, including U.S. Federal Reserve Board
Chairman Alan Greenspan's scheduled testimony Wednesday on
monetary policy, said Emmanuel Ng, economist at Bank of Tokyo-
Mitsubishi.
Also on tap Wednesday is the unveiling of Tokyo's eagerly
awaited anti-deflation package. And the Bank of Japan has a
scheduled policy meeting on Thursday.
An upbeat assessment of the U.S. economy by Greenspan could be
U.S. dollar bullish, while disappointing anti-deflation measures
by the Koizumi administration could weigh on the yen, analysts
said.
The New Taiwan dollar was buoyed by exporter selling of the
U.S. dollar and a strengthening of the Japanese yen.
The U.S. dollar closed at NT$35.090 compared with the previous
close of NT$35.102.
Against the yen, the U.S. dollar was quoted at 133.85 yen,
down from 134.04 yen late Friday in New York.
The Taiwanese central bank, which intervenes in the market on
a regular basis to prevent the New Taiwan dollar from
appreciating too fast, bought around US$50 million to bolster the
U.S. currency.
The Singapore dollar also benefited from a mildly stronger
yen, but traded in a tight band.
Near the end of Asian trading the U.S. dollar was quoted at
S$1.8318, down slightly from S$1.8325 late Friday. It traded
between S$1.8305 and S$1.8330.
The South Korean won faced mild selling pressure as foreign
selling of Korean shares raised concerns of currency outflows
later in the week.
The U.S. dollar closed at 1,323.9 won, up from Friday's close
of 1,322.0 won. The currencies traded in a tight range of 1,321.1
won to 1,324.6 won.
Foreigners unloaded a net 135.9 billion won of South Korean
shares on profit-taking Monday, contributing to a 0.1 percent
drop in the main index of the Korea Stock Exchange.
Against the rupiah the U.S. dollar was little changed at Rp
10,175, compared with Rp 10,180 late Thursday. Indonesian markets
were closed Friday for a public holiday.
Dealers said the Indonesian central bank was suspected of
selling U.S. dollars to support the local currency.